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COLLECTIVISM 


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COLLECTIVISM 

■  ■  ■  i__ 

A    STUDY    OF    SOME    OF    THE 

LEADING   SOCIAL   QUESTIONS 

OF   THE   DAY 


BY  PAUL  LEROY   BEAULIEU 

MBMBKB  OF  THK  IMSTITUTE  AND  FB0KK8S0B  Or  THE 
COLLEOB  OF  FRANCI 


TRANSLATED   AND  ABRIDGED 

BY   SIR  ARTHUR  CLAY,   Baet. 


MERCAi^TiLCLibhARV: 
NEW  ''{s:^R^, 


w4" !  *£7'T3 


^-1 

NJew  yor^ 

te.  p.  BUTTON    AND    COMPANY 

1908 


PmUed  in  Great  Britain, 


PREFACE 

M.  Le  Paul  Leroy  Beaulieu's  great  reputation  as  a 
writer  on  social  subjects  is  a  guarantee  of  the  knowledge 
and  thoroughness  with  which  the  subject  of  this  book  has 
been  treated. 

His  statement  and  explanation  of  the  doctrine  is  con- 
spicuously fair,  his  examination  of  its  various  forms  is 
exhaustive,  and  his  exposure  of  the  fallacies  upon  which 
the  claims  of  collectivism  are  based  is  clear  and  complete. 

The  translator  felt,  therefore,  that  if  this  work  were 
made  available  to  the  British  public,  it  would  be  of  great 
value  in  assisting  the  formation  of  a  sound  opinion  upon 
a  question  of  such  vital  importance  to  the  future  of 
humanity.  M.  P.  Leroy  Beaulieu  very  readily  gave  his 
permission  for  its  translation  into  English.  The  book, 
however,  is  of  considerable  length,  and  the  cost  of  publica- 
tion of  a  full  translation  would  have  greatly  restricted  the 
circulation ;  the  translator  therefore  requested  permission 
to  publish  an  abridgment — a  request  to  which  M.  P.  Leroy 
Beaulieu  very  kindly  acceded. 

Whilst  the  translator  is  painfully  conscious  of  the  loss 
arising  from  curtailment,  and  of  his  inability  to  do  justice 
to  the  delicate  precision  of  the  French  language,  he 
ventures  to  hope  that  nothing  essential  to  the  argument 
has  been  omitted. 

The  translator  desires  to  record  his  gratitude  to 
M.  P.  Leroy  Beaulieu  for  the  permission  so  graciously 
given. 

ARTHUR  CLAY. 

July  igoS. 

V  a  2 


CONTENTS 


BOOK    I 


CHAPTER  I 

Definition  of  the  meaning  of  the  terms  Socialism,  Collectivism, 
and  Communism.  Description  of  the  objects  and  pro- 
posed methods  of  Collectivism  .... 


CHAPTER  H 

Relation  of  capital  and  labour.  Position  of  workman  not  im- 
proved under  a  coUectivist  rdgime.  What  is  Capitalism  ? 
Origin  of  capital  ......        lo 


CHAPTER  HI 

Origin  of  private  property  in  land.  Cause  of  increase  in  value. 
Prescriptive  right.  Marx^  indictment  of  personal  pro- 
perty. Distribution  of  wealth.  "Unearned  Increment." 
Influence  of  social  conditions  external  to  the  individual 
upon  the  acquisition  and  ownership  of  wealth.  The  element 
of  "  chance  "  or  "  luck."  Can  collectivism  find  an  efficient 
substitute  for  the  incentive  of  personal  interest  ?      .  .        19 


viii  CONTENTS 


CHAPTER  IV 

PAOB 

Arguments  against  private  ownership  of  land  founded  upon 
natural  justice  and  historical  precedent.  Development  of 
individual  out  of  collective  ownership  of  land  .  .        33 


CHAPTER  V 
Existing  systems  of  collective  ownership  of  land .  .  .41 

CHAPTER  VI 

Land  can  never  have  been,  strictly  speaking,  common  property. 
First  appearance  of  social  inequality.  Features  common 
to  all  collective  systems  of  land  tenure.  Causes  of  the 
general  disappearance  of  these  systems.  Claim  of  nations 
to  their  land  the  same  as  that  of  individuals.  Modern 
attempts  to  re-establish  collectivist  ownership  of  land. 
Effect  of  proposed  nationalisation  of  land  in  France.  In- 
demnity or  confiscation.  Various  methods  proposed  for 
indemnifying  owners.  Hypothetical  purchase  of  the  land 
by  the  English  Government.  Unearned  Increment.  Func- 
tions of  a  landowner   .  .  .  .  .  •        59 


BOOK    II 


CHAPTER  I 


Industrial  collectivism.  Marx  and  Lassalle.  Definition  of 
capital.  "  Les  liens  sociaux."  Use  of  "  money."  Capital 
not  the  result  of  saving.  Lassalle's  explanation  of  origin 
of  capital  .......        93 


CONTENTS  ix 


CHAPTER  II 

PAOB 

Capital  itself  is  unproductive.  Definition  of  "profit"  or  "plus- 
value."  Marx'  theory  of  "plus-value,"  and  his  explanation 
of  the  origin  of  capital.  "Constant"  and  "variable" 
capital.  "Values-in-exchange"  and  "values-in-utility." 
Labour-force  and  its  value.  Iron  law  of  Lassalle.  Claim 
of  capital  to  interest   ......      109 


CHAPTER   III 

Variation  of  "plus-value."  "Absolute"  and  "relative  plus- 
value."  Function  of  the  capitalist.  "Competition." 
Methods  for  the  increase  of  "plus-value."  Legislative 
remedies.  Excess  of  wage  earners.  Introduction  of 
machinery.  Machinery  a  defence  of  wage  earners.  Im- 
proved condition  of  wage  earners.    Decrease  of  pauperism      129 


CHAPTER  IV 

The  practical  application  of  collectivism.  Quintessence  of 
Socialism  only  available  source  of  information.  Automatic 
performance  of  social  functions.  Free  choice  of  personal 
requirements.  National  production.  Variation  of  salaries 
and  wages.  Statistics  and  national  production.  Mutual 
surveillance  by  workmen.  Joint  stock  companies  and  state 
management.    Individuals  and  the  progress  of  humanity  .      154 


CHAPTER  V 

Distribution  under  a  collectivist  regime.  Social  labour-time  as 
a  standard  of  value.  Labour  cheques.  Usury  and  private 
trading.  Choice  of  domicile.  Relations  of  a  collectivist 
state  with  other  countries.     International  trade       .  .       1S5 


CONTENTS 


CHAPTER  VI 


Economy  of  labour  under  a  collectivist  system.  Evils  of  com- 
petition, and  the  remedy  for  them.  Effect  of  general 
diffusion  of  education.  The  production  of  luxuries.  The 
abolition  of "  rentiers."    Fashion       .  .  .  .214 


BOOK    III 

CHAPTER  I 

The  Quintesseitce  of  Socialism  as  a  source  of  information. 
Bernstein's  criticism  of  Marxian  doctrine.  Socialisme 
tMorique  et  Sociale  dhnocratie  'pratique.  Concentration  of 
wealth  and  concentration  of  industry.  Agricultural  hold- 
ings in  the  German  Empire   .....      245 


CHAPTER  II 

Concentration  of  industry.  Census  of  1896.  Survival  of  small 
industries.  Marx'  theory  of  industrial  and  commercial 
crises.  Bernstein  and  his  critics.  Chaotic  period  of  in- 
dustrial organisations.  Sources  from  which  Marx  obtained 
information.  Socialisme  et  Science.  Criticism  of  "  scientific 
socialism."  Jaur^s  and  Etudes  Socialistes.  Millerand  and 
the  Socialisme  Riformiste.  Destruction  of  theoretical 
socialism         .......      259 


CHAPTER   III 

The  "  Parti  Socialiste  frangais,"  the  "  Parti  Ouvrier,"  and  the 
"  Parti  Socialiste  de  France."  Enquiry  into  political  differ- 
ences amongst  socialists  by  George  Renard.  The  five 
points  of  the  new  programme.  Co-operative  associations  : 
(1)  for  production ;  (2)  for  consumption.  Administration 
of  industries  by  the  state  and  by  municipalities        .  .      278 


CONTENTS  ad 

CHAPTER  IV 

PAOR 

Municipal  socialism.  Trades-unions.  Progressive  taxation. 
"  Solidarism."  The  "  intellectuals."  The  barriers  of  educa- 
tion. The  two  divisions  of  the  new  middle  class.  The 
position  of  officials  under  a  democratic  government.  The 
essential  similarity  of  the  aims  of  the  different  schools  of 
socialism  .......      303 

Conclusion         .......     326 

Index        ........      331 


BOOK  I 


N.B. — The  Translator's  notes  are  enclosed  in  square  brackets 


NEW  YORK. 


CHAPTER   I 

Definition  of  the  meaning  of  the  terms  Socialism,  Collectivism,  and 
Communism,  Description  of  the  objects  and  proposed  methods 
of  Collectivism. 

The  difficulty  of  making  a  critical  examination  of  the  doc- 
trines of  "  Collectivism  "  or  "  Socialism  "  is  greatly  increased 
by  the  fact  that  they  have  never  been  formulated  with 
precision  by  any  well-known  socialist  writer,  and,  except 
in  a  small  book  by  M.  Schaffle,^  no  serious  attempt  has 
been  made  either  to  give  a  definite  meaning  to  the  word 
"  socialism,"  or  to  show  how  a  socialistic  system  could  be 
established. 

The  task  of  criticism  would  also  be  simplified  if  the 
leading  exponents  of  socialism  were  in  agreement  upon 
fundamental  principles,  but  reference  to  the  writings  of 
Lassalle,  Karl  Marx,  Schaffle,  and  others,  shows  that 
this  is  far  from  being  the  case,  and  that,  on  the  contrary, 
the  divisions  between  them  are  both  wide  and  deep.  In 
place,  therefore,  of  dealing  separately  with  the  exponents 
of  these  varying  doctrines,  it  is  proposed  first  to  ascertain 
the  general  content  of  the  "  New  Socialism,"  and  then  to 
consider  this  doctrine  in  relation  to  the  principles  of 
economy. 

The  terms  Socialism,  Collectivism,  and  Communism 
may  be  thus  defined : — Socialism   is  a  generic  term,  and 

*  The  Quintessence  of  Socialism^  by  Dr  A.  Schaffle,  English 
edition.     Swan,  Sonnenschein  &  Co.,  Ltd.,  1902. 

[For  the  convenience  of  English  readers,  references  are  given  to  the 
English  edition  of  the  Quintessence  of  Socialism^ 


4  DEFINITIONS  AND  DIFFERENCES 

denotes  state  interference  with  the  relations  between 
producers  and  consumers,  with  the  object  of  rectifying 
social  inequality,  of  establishing  official  control  of  con- 
tractual obligations,  now  freely  entered  into  between 
individuals,  and  of  nullifying  the  influence  of  natural  or 
economic  advantages  possessed  by  employers  in  making 
bargains  with  workmen. 

Socialism  hopes  to  succeed  by  means  of  state  rule  and 
state  competition  with  private  enterprise ;  its  field  of 
action  is  therefore  undefined,  and  it  assumes  the  most 
varied  forms :  for  this  reason  its  effect  would  be,  to  some 
extent,  superficial ;  it  would  more  or  less  alter  existing 
social  relations  in  respect  of  the  organisation  of  production 
and  the  distribution  of  products,  but  the  change  would  not 
be  complete.  Communism,  however,  would  involve  the 
entire  alteration  of  social  conditions  :  under  this  regime 
all  private  ownership  would  be  suppressed  ;  not  only  the 
work  and  the  remuneration  of  every  member  of  society, 
but  even  their  personal  requirements,  would  be  regulated 
by  authority,  and  no  place  would  be  left  in  the  economic 
world  for  individual  initiative,  for  personal  responsibility, 
or  even  for  liberty. 

Collectivism,  as  defined  by  Schaffle,  consists  in  the 
state  ownership  of  all  means  of  production  without  excep- 
tion, in  the  substitution  of  state  for  private  organisation 
of  labour,  and  in  the  distribution  of  the  products  by  the 
state  to  workmen  in  proportion  to  the  quantity  and  the 
value  of  their  labour.  Were  it  not  for  this  last  provision, 
there  would  seem  to  be  but  little  difference  between 
collectivism  and  communism ;  but  if  in  the  distribution  of 
produce  regard  is  paid,  not  only  to  the  quantity,  but  also 
to  the  quality  of  the  work,  it  is  obvious  that  the  system  is 
widely  differentiated  in  theory  from  that  of  communism 
pure  and  simple,  although  the  difference  would  be  difficult 
to  maintain  in  practice. 

Collectivism  professes  that  it  would  nationalise  the 
means  of  production  only,  and  not  the  products;  that 
under  its  regime  everyone  would  retain  the  free  determina- 
tion of  his  requirements  and  possession  of  the  means  of 


RECRUDESCENCE  OF  SOCIALISM  5 

consumption ;  even  private  wealth  would  not  be  altogether 
suppressed,  but  it  would  consist  only  of  the  means  of 
consumption ;  "  money "  would  cease  to  exist,  but  a 
measure  of  value  would  be  provided  by  means  of  vouchers 
representing  credit  for  the  performance  of  social  work,  and 
private  saving  might  be  effected  by  the  accumulation  of 
these  vouchers.  This  form  of  saving,  however,  would  be  of 
a  very  primitive  character,  and  would  produce  no  return. 
Even  the  right  of  inheritance  would,  it  is  said,  be  respected, 
and  national  savings,  in  the  most  perfect  and  remunerative 
form,  would  be  established. 

For  the  transformation  of  existing  social  conditions, 
collectivism  would  make  use  of  a  system  of  terminable 
annuities,  and,  in  expropriating  capitalists,  would  allot  them 
indemnities  payable  annually  by  instalments  for  periods 
varying  in  duration  according  to  the  patience  or  generosity 
of  collectivist  writers  and  legislators. 

The  question  whether  or  not  these  doctrines  are  logical, 
and  whether  collectivism  thus  conceived  would  not 
necessarily  lead  step  by  step  to  pure  communism,  will  be 
considered  later. 

Socialistic  ideas  have  of  late  regained  ascendancy  in 
many  minds — the  infection  spares  neither  class  nor  country — 
and  a  large  number  of  persons,  more  or  less  unconscious 
of  the  tendency  of  their  action,  are  urging  modern  govern- 
ments to  follow  the  path  which  leads  to  collectivism. 

The  present  time  therefore  appears  to  be  particularly 
opportune  for  an  examination  of  this  doctrine. 

Collectivism,  although  more  restricted  in  scope,  is  more 
definite  than  communism,  and,  at  any  rate  in  appearance, 
is  more  capable  of  practical  application,  and  more  com- 
patible with  individual  liberty.  Schaffle  lays  stress  upon 
this  point,  and  declares  that  if  the  establishment  of  col- 
lectivism would  entail  the  destruction  of  liberty,  it  must 
be  regarded  as  the  mortal  foe  of  civilisation  and  of  all 
intellectual  and  material  well-being.  Collectivism  requires 
that  all  instruments  and  means  of  production  must  be 
the  property  of  the  state  (that  is,  of  the  community  as  a 
whole),  personal   property  being   restricted   to   means  of 


6  COLLECTIVISM 

consumption  only  ;  but  how  are  these  to  be  distinguished  ? 
It  is  obvious  that  many  products,  as,  for  example,  a  house, 
a  garden,  a  piece  of  cloth,  a  horse,  apples  or  grapes,  may 
assume  either  character  at  the  will  of  the  possessor ;  no 
such  differentiation  is,  in  fact,  possible ;  there  is  no  product 
which  may  not  be  either  the  material  or  the  means  of 
ulterior  production. 

The  difficulty  of  enforcing  a  regulation  that  no  one 
should  own  any  means  of  production,  such  as  a  needle  or 
a  sewing  machine,  except  for  personal  use,  would  be 
practically  insuperable. 

It  is  clear  that  collectivism,  as  described  by  Schaffle, 
would  soon  end  in  one  of  two  ways — either  in  the 
clandestine  reappearance  of  most  of  the  social  inequalities 
it  professes  to  abolish,  or  in  pure  communism — a  system  to 
which  the  majority  of  collectivists  are  strongly  opposed. 
They  are,  however,  far  from  being  agreed  upon  their  own 
proposals.  Whilst  some  advocate  the  total  abolition  of  all 
rents  for  houses  or  land,  others,  as  for  instance  collectivists 
of  the  Franco-Belgian  school,  propose  that  the  state  should 
own  the  land,  but  should  grant  leases  of  it  to  individuals. 
Thus,  whilst  one  section  of  collectivists  would  attack  real 
property  only,  another  would  absorb  all  the  means  of  pro- 
duction. To  prove  the  necessity  for  the  establishment  of 
their  system,  collectivists  assert  that  the  existing  social 
system,  based  upon  private  property  and  private  contract, 
is  contrary  to  justice — an  assertion  they  attempt  to  justify 
by  the  following  arguments. 

Private  property,  they  say,  has  possessed  itself  of 
things  which  by  their  nature  are  common  to  all  mankind, 
such  as  land  and  minerals,  which  are  not  products  of 
human  labour,  and  ought  not,  therefore,  to  be  subjects  of 
private  ownership.  Private  possession  of  other  kinds  of 
wealth  they  declare  to  be  equally  unjust,  since  "  capital," 
falsely  asserted  by  economists  to  be  the  result  of  thrift,  has 
in  reality  been  created  by  the  fraudulent  retention  of  a 
portion  of  the  product  of  labour  to  which  the  labourer  is 
entitled.  The  appropriation  by  the  community  of  all 
means  of  production  is  therefore  declared  to  be  necessary 


THE  "PROLETARIAT"  7 

for  social  harmony  and  for  the  progress  of  humanity. 
They  also  assert  that  under  existing  social  conditions  man- 
kind is  divided  into  two  numerically  very  unequal  parts — 
plutocrats  on  the  one  side,  and  the  proletariat  on  the  other — 
that  this  division  is  becoming  more  and  more  accentuated, 
that  intermediate  classes  have  disappeared,  and  that 
graduation  of  society  has  consequently  ceased  to  exist. 

The  term  proletariat,  divorced  from  its  original  mean- 
ing, is  used  by  collectivists  to  designate  that  section  of 
society  which,  although  it  depends  upon  manual  labour  for 
its  existence,  does  not  possess  the  instruments  necessary 
for  that  labour.  Men  thus  situated,  it  is  said,  cannot  be 
free ;  they  are  compelled  to  rely  upon  others  for  the  means 
of  work,  without  which  they  could  not  exist,  and  are 
therefore  forced  to  accept  as  remuneration  a  fraction  only 
of  the  product  of  their  toil.  Another  argument  advanced 
in  favour  of  the  collective  ownership  of  all  means  of  pro- 
duction is,  that  to  allow  capital,  described  as  being  inert 
or  dead  matter,  to  dictate  the  conditions  of  labour,  is  an 
insult  to  humanity  ;  it  is  rather  labour  that  ought  to  direct 
the  employment  of  capital.  These  arguments  are  put 
forward  as  being  conclusive,  but  it  is  obvious  that  there 
is  much  to  be  said  in  reply. 

The  definition  of  the  "  proletariat "  as  men  who  do  not 
themselves  possess  the  instruments  necessary  for  their 
work,  would  include  almost  the  whole  of  mankind,  and  in 
this  respect  the  class  referred  to  is  in  no  worse  a  position 
than  the  rest  of  humanity ;  to  assert  that  capital,  being 
inert  material,  dictates  the  conditions  of  labour,  is  equally 
misleading;  it  is  not  "inert  matter,"  but  living  men, 
themselves  the  possessors  of  capital,  and  either  its  creators, 
or  heirs  of  its  creators,  who  impose  conditions  for  its  use. 

These  arguments,  based  upon  the  relations  between 
labour  and  capital,  are  put  forward  as  being  self-evident 
propositions  which  require  no  proof,  or  as  being  supported 
by  the  dicta  of  certain  well-known  economists ;  these 
dicta,  however,  although  possibly  true  of  a  particular 
country  or  at  a  particular  time,  cannot  be  accepted  as 
being   universally   applicable.       The   pronouncements    of 


8  BASIS  OF  SOCIAL  THEORIES 

Turgot,  Adam  Smith,  Ricardo,  and  J.  S.  Mill,  are  those 
principally  relied  upon  by  coUectivists ;  but  apart  from 
these  eminent  economists,  coUectivists  employ  an  original 
and  ingenious  dialectic,  in  order  to  prove  that  capital  is  not 
created  by  saving,  and  that  wages  do  not  constitute  the 
full  remuneration  of  labour— assertions  which  are  supported 
by  Lassalle  with  much  ingenuity  and  with  a  wealth  of 
illustration,  and  by  Marx  with  great  subtlety ;  but  before 
dealing  with  their  arguments,  the  following  points  may  be 
considered. 

All  social  theories  ought  to  be  inspired  by,  and 
founded  upon,  the  three  ideas  of  justice,  of  utility,  and  of 
individual  liberty;  and,  broadly  speaking,  the  existing 
economic  system,  with  some  exceptions,  fulfils  these 
conditions.  Of  these  exceptions,  some  would  be  unavoid- 
able under  any  social  system,  whilst  the  remainder  will 
gradually  disappear  with  the  progress  of  social  ameliora- 
tion. The  existing  economic  organisation  is  not  the 
conception  of  any  one  man  or  collection  of  men ;  it  is  a 
natural  system  spontaneously  evolved  by  humanity.  Is  it 
to  be  supposed  that  the  ideas  of  justice,  of  utility,  and  of 
liberty,  by  which  a  social  system  must  be  conditioned,  are 
more  likely  to  be  combined  in  the  artificial  regime  it  is 
proposed  to  establish,  than  under  the  naturally  developed 
system  now  in  existence?  Granting  the  possibility  of  a 
more  equitable  distribution  of  products,  this  alone  would 
be  insufficient,  unless  the  total  production  under  the  new 
would  be  at  least  as  great  as  under  the  existing  system, 
and  capable  of  an  equal  rate  of  expansion  ;  and  if  the  new 
regime,  whilst  partly  eliminating  inequalities  of  distribution, 
should  at  the  same  time  lessen  individual  enterprise  and 
restrict  production,  mankind  would  gain  nothing  and  lose 
much ;  even  admitting  that  these  evil  consequences  might 
be  avoided,  there  would  still  be  no  adequate  reason  for 
abandoning  the  present  system,  since  there  would  be  no 
security  for  liberty,  which  is  an  essential  element  of  justice. 
Collectivism  no  doubt  professes  to  assure  individual  liberty, 
but  since  under  its  regime  all  instruments  of  work  would 
be  the  property  not  of  the  labourer  but  of  the  community, 


THE  STATE  THE  ONLY  MASTER      9 

no  man  could  use  them  except  in  the  social  workshops  and 
under  official  direction,  and  the  workman,  in  place  of  having, 
as  he  now  has,  the  whole  field  of  industry  open  to  him,  and 
liberty  of  choice  amongst  a  multitude  of  employers,  would 
have  only  one  master  to  whom  to  apply,  the  state,  with  its 
rigid  regulations  and  its  intolerance  of  spontaneous 
individual  action.  How  could  industrial  liberty  exist 
under  such  a  system  ? 


CHAPTER  II 

Relation  of  capital  and  labour.     Position  of  workman  not  improved 
under  a  coUectivist  rdgitne.  What  is  Capitalism  ?   Origin  of  capital. 

Collectivism  has  both  a  negative  and  a  positive  side. 
It  is  the  former  which  has  hitherto  received  most  attention, 
and  the  efforts  of  coUectivist  writers  have  been  directed 
rather  to  criticism  of  the  abuses  of  a  capitalistic  society 
than  to  the  exposition  of  the  system  by  which  they  propose 
to  replace  it.  The  examination  of  the  origin  and  growth 
of  capital  by  Marx,  in  his  book  Das  Kapital,  is,  according 
to  Schaffle,  the  critical  evangel  of  the  European  workmen 
of  the  present  day,  and  in  another  place  the  same  author 
writes :  "  Criticism  of  capital  is  the  most  important  prepara- 
tory work  at  the  present  time." 

Before  proceeding,  it  will  be  useful  to  reconsider  some 
of  the  more  general  objections  made  to  capital  in  its 
present  form.  It  is  said  to  be  contrary  to  reason  that 
capital,  which  represents  the  labour  of  yesterday  and  is 
dead,  should  direct  the  work  of  to-day ;  but,  as  has  already 
been  pointed  out,  it  is  living  men,  who  direct  the  way  in 
which  their  capital  shall  be  employed.  There  are  many 
reasons  why  this  should  be  so ;  for  instance,  there  is  the 
financial  risk,  which  is  infinitely  greater  for  the  capitalist 
than  for  the  workman,  whose  wages  are  practically  secure 
from  risk;  but  there  is  a  far  more  important  reason — namely, 
the  advantage  secured  by  the  division  of  labour,  which 
without  capital  would  be  unattainable.  Collectivists  them- 
selves admit  that  this  principle  must  govern  all  modern 
industry ;  but  for  its  application,  skilled  direction  is 
indispensable,  and    this    would    necessarily    involve    the 

10 


DIVISION  OF  LABOUR  11 

separation  of  administrative  from  executive  functions. 
Under  a  collectivist  regime  the  manual  labourer  would  be 
no  more  capable  of  efficiently  co-ordinating  and  directing 
industrial  operations  than  he  is  now,  and  this  function 
would  inevitably  fall  into  the  hands  of  men  who  have 
made  it  their  business  to  acquire  the  necessary  knowledge 
and  experience.  This  separation  of  function  is  not  only 
essential  to  industrial  production  upon  a  large  scale,  but  it 
may  be  said  to  be  an  absolute  condition  of  all  civilisation, 
and  all  attempts  to  dispense  with  it  have  resulted  in 
failure.  This  fact  is  illustrated  by  the  history  of  industrial 
associations  for  production.  In  England  and  Germany,  as 
well  as  in  France  and  elsewhere,  the  common  fate  of  these 
associations,  with  but  the  rarest  exceptions,  is  either  to 
dissolve  after  a  more  or  less  prolonged  struggle,  or  to  lose 
their  original  character  and  become  transformed  into  a 
kind  of  joint  stock  company.^  Confirmation  of  this  state- 
ment may  be  found  in  the  report  of  the  Government  En- 
quiry on  Workmen's  Associations,  recently  made  in  France. 
Although  this  enquiry  dealt  only  with  small  societies  of 
artisans,  mention  is  constantly  made  in  it  of  paid 
assistants  :  some  of  these  so-called  co-operative  associations 
had  no  more  than  from  four  to  fifteen  or  twenty  members ; 
and  of  those  which  appeared  to  be  the  most  successful, 
some  actually  boasted  of  possessing  a  dictatorial  adminis- 
tration.2  It  is,  indeed,  admitted  by  the  more  enlightened 
and  sincere  collectivists,  that  it  would  not  be  possible  to 
entrust  the  conduct  of  enterprises  to  manual  labourers ;  no 
doubt,  as  frequently  happens  now,  a  workman  may  rise 
and  eventually  become  an  administrator,  but  the  members 
of  a  committee  of  direction  must  always  be  few  in  number 
compared  with  the  mass  of  the  labourers,  and,  since 
direction  demands  both  experience  and  talent,  constant 
change  would  be  impossible,  and  the  office  could  not  be 
held  by  each  one  in  rotation. 

*  See  La  Question  Ouvrilre  au  XIX  Sikle,  P.  Leroy  Beaulieu, 
2nd  ed.,  Paris,  1882. 

^  See  UEnquete  de  la  Cotnmission  extra-par lementaire  dcs  Associ- 
ations Ouvrilres.     Paris,  I'lmprimerie  Nationale,  1883. 


12    THE  WAGE  EARNER  AND  COLLECTIVISM 

Whether  conferred  by  election  or  by  nomination,  author- 
ity, to  a  large  extent  discretionary,  would  be  centred  in 
the  committees  by  which  labour  would  be  directed  and 
controlled,  and  the  position  of  the  great  majority  of  the 
labourers,  under  a  collectivist  regime,  would  be  one  of 
subordination  possibly  more  absolute  than  at  present. 
The  promise  that  the  position  of  the  workmen  would  be 
greatly  improved  in  this  respect  is  therefore  delusive,  as 
is  also  the  assurance  that  workmen  would  become  owners 
of  the  instruments  of  labour.  Those  who  make  such 
promises  are  either  deceivers  or  are  themselves  deceived, 
and  to  secure  their  fulfilment  would  be  beyond  the  power 
of  collectivism.  All  instruments  would  be  the  property  of 
the  community  as  a  whole,  and  to  it  a  workman  would  be 
compelled  to  apply  for  the  privilege  of  using  them,  just  as 
at  the  present  time  he  has  to  apply  to  an  employer.  But 
the  community  is  an  abstraction,  and  for  practical  purposes 
must  be  represented  by  officials,  who  would  have  the 
absolute  control  and  direction  of  all  industries,  even  of  the 
most  insignificant ;  and  to  them  the  workmen  would  have 
to  apply,  not  only  for  the  instruments,  but  also  for  the 
necessary  material  of  labour,  for  a  place  wherein  to  work, 
and  for  wages.  To-day,  if  rejected  by  one  employer,  a 
workman  can  seek  another ;  if  he  finds  his  work  insuffi- 
ciently paid,  he  can  adopt  some  other  kind  of  industry ; 
if  his  surroundings  are  unsympathetic  or  work  unattain- 
able, he  can  go  elsewhere ;  but  under  a  collectivist  regime 
his  only  resource  would  be  to  apply  to  officials,  who 
would  be  in  a  position  to  exercise  a  despotism  hitherto 
unknown  to  humanity.  It  may  be  said  that  these  officials 
would  have  no  right  to  refuse  work  and  remuneration  to 
any  individual  under  their  jurisdiction ;  this  might  be  so, 
but  it  would  still  be  in  their  power  to  impose  onerous  and 
humiliating  conditions  in  granting  the  request.  To  the 
argument  that  an  appeal  would  lie  to  a  higher  authority, 
it  is  sufficient  to  reply,  that  however  intricate  and  ingenious 
the  system,  it  would  be  impossible  to  protect  a  workman 
— who  has  no  choice  of  employers,  who  would  have  to 
depend  entirely  upon  the  officials  representing  the  com- 


SOCIALISM  AND  THE  SUFFRAGE  13 

munity  for  work,  and  who  could  not  change  his  pro- 
fession or  his  domicile  without  official  sanction — from 
a  state  of  serfdom  more  complete  than  that  of  the  serfs 
of  the  middle  ages,  who,  under  the  sanction  of  inviolable 
custom,  were  at  any  rate  in  possession  of  the  land  they 
occupied. 

Thus  collectivism  would  be  unable  to  secure  independ- 
ence for  the  workman ;  he  would  not,  any  more  than 
under  the  present  system,  possess  the  instruments  neces- 
sary for  his  labour,  or  be  better  able  to  influence  the 
direction  of  enterprise.  His  only  resource  would  be  the 
indirect  and  intermittent  action  of  the  franchise,  and  on 
this  point  it  should  be  noted  that  coUectivists  carefully 
avoid  committing  themselves;  they  appear  indeed  to  be 
but  little  inclined  to  encourage  representative  institu- 
tions. "  Universal  suffrage,"  says  Schaffle,  "  would  not 
be  absolutely  necessary  to  a  victorious  socialism.  It  is 
true  that  during  the  transition  period  of  the  struggle, 
during  the  progress  of  the  conflict  with  liberalism, 
socialism  will  adhere  to  the  principle  of  universal 
suffrage."^  Further  on  this  same  author  speaks  of  the 
representative  system  as  being  delusive  and  misleading. 
This  is  not  encouraging,  nor  is  his  statement  that  under 
a  coUectivist  rigime  "individual  freedom,  free  migration, 
free  choice  of  occupation,  anight  perhaps  be  maintained 
in  force."  ^  Schaffle  is  well  advised  in  thus  refraining 
from  more  positive  assertions,  seeing  that  these  "  liberties," 
which  he  enumerates,  are  entirely  incompatible  with  the 
theory  and  the  practice  of  the  system  he  advocates.  The 
inference  to  be  drawn  from  this  preliminary  examination 
of  the  doctrine  of  collectivism  is  :  that  in  respect  of  liberty 
and  independence,  the  workman  would  gain  nothing,  since 
neither  as  regards  possession  of  the  instruments  of 
production,  nor  in  the  control  of  the  enterprises,  by 
which  he  lives,  would  he  be  in  any  better  position  than 
he  is  at  the  present  time ;  rather  the  contrary,  for  in  a 
country  such  as  France,  at  least  half  of  the  workmen  are 
already  either  partly  or  wholly  in  possession  of  the 
'  Schaffle,  op,  cit.^  p.  51.  ^  Ibid.,  p.  84. 


14  CAPITALISM  NOT  CAPITAL  IS  THE  ENEMY 

instruments  necessary  for  their  work,  such,  for  instance, 
as  peasant  proprietors,  village  blacksmiths,  carpenters, 
shoemakers,  and  many  others.  Collectivism  would  rob 
these  people,  and  would  hand  over  their  possessions  to 
officials,  and  thus  would  make  the  evil  of  the  separation 
of  the  workman  from  his  tools,  which  it  denounces, 
universal  instead  of  partial ! 

Since  a  coUectivist  is  contrasted  with  a  capitalist 
system,  and  coUectivist  with  capitalist  society,  it  is  im- 
portant, in  order  to  avoid  attributing  ideas  to  our 
opponents  which  they  would  repudiate,  to  define  clearly 
what  is  intended  by  these  terms.  Capital  itself  is  not 
the  object  of  attack,  for  collectivists  declare  that  "  capital," 
notwithstanding  its  detrimental  effects,  is  in  itself  a  desir- 
able thing,  and  assert  that  having  taken  possession  of 
it,  they  would  maintain  and  even  increase  it :  it  is,  indeed, 
manifest  from  categorical  statements  made  by  the  prin- 
cipal coUectivist  writers,  that  it  is  not  against  "capital," 
but  against  "capitalism"  and  a  capitalistic  society,  that 
they  declare  war. 

What,  then,  is  "  capitalism  "  ?  A  distinctive  feature  of 
the  industry  of  the  present  day,  according  to  Marx,  is 
that  production  is  carried  on  in  large  manufactories,  in 
place  of  the  home,  in  which  production  has  now  almost 
disappeared.  Formerly  the  greater  part  of  the  produce 
of  each  family  was  intended  for  its  own  consumption, 
and  this  had  two  consequences — firstly,  that  hardly  any- 
thing but  objects  of  real  and  essential  utility  were 
produced ;  and  secondly,  that  since  each  producer  con- 
sumed the  greater  part  of  his  own  produce,  profit  on 
exchange  was  restricted,  and  thus  large  fortunes  rapidly 
acquired  by  means  of  commercial  or  industrial  gains 
could  not  be  made.  The  distinction  here  made  between 
"values  in  use"  and  "values  in  exchange"  plays  an 
important  part  in  Marx'  "criticism  of  capital,"  and  his 
dialectic  is  based  upon  it.  He  asserts  that  by  an  abuse 
of  human  industry,  human  labour  is  diverted  from  the 
production  of  commodities  essentially  useful  to  humanity, 
to  the  production  of  superfluities  and  luxuries,  and  that 


MARX  ON  PRIVATE  PROPERTY  15 

in  this  way,  a  particular  direction  is  given  to  human 
industry,  to  the  detriment  of  society  as  a  whole.  This, 
he  says,  is  the  great  evil,  and  according  to  him,  it  is 
one  with  which  economists  do  not  concern  themselves.  This 
criticism  has  some  force,  and  will  be  examined  later  on, 
but  it  is  not  the  argument  to  which  collectivists  attach 
most  importance. 

A  dominant  characteristic  of  a  capitalistic  rigime  is 
said  to  be  a  tendency  to  the  concentration  of  capital,  a 
tendency  which  it  is  asserted  will  ultimately  bring  about 
its  own  destruction.  It  is  also  asserted  that  small  in- 
dustries have  been,  and  are  being,  annihilated,  and  that 
the  existing  system  tends  more  and  more  to  the  division 
of  the  population  into  two  parts — the  "  proletariat "  on  the 
one  side  and  a  handful  of  "  plutocrats "  on  the  other. 
Collectivists  say  also  that  the  "capitalist"  society  of 
to-day  bears  no  resemblance  either  to  the  "  collectivist " 
society  of  the  future  or  to  the  conditions  of  society  in  the 
past.  They  look  upon  the  social  organisation  of  the 
middle  ages  as  possessing  some  desirable  characteristics 
which  might  well  be  borrowed,  and  they  declare  that 
the  liberal  economic  system  which  slowly  grew  out  of  it, 
and  by  which  it  has  been  replaced,  is  for  the  majority  of 
mankind  the  worst  of  servitude. 

According  to  Marx,  private  property,  acquired  by 
individual  labour,  and  based  upon  close  association  of  the 
independent  isolated  workman  with  his  work,  has  now 
been  supplanted  by  private  capitalist  property  derived 
from  the  labour  of  others,  nominally  free  men.  The 
capital  of  to-day  originated  in  the  destruction  of  the 
small  property  of  the  artisan  and  the  peasant,  in  the 
production  of  which  the  workmen  and  the  product  were 
so  intimately  connected  that  it  became  their  private 
property  in  a  true  sense.  This  system,  now  no  longer  in 
existence,  although  temporarily  satisfactory  and  relatively 
equitable,  had  a  serious  drawback,  in  that  it  involved 
the  dispersion  of  the  means  of  production.  The  pro- 
ducts therefore  suffered,  both  in  quantity  and  in  facility 
of    manufacture;    thus,    however    interesting    and    meri- 


16         MARX  ON  THE  ORIGIN  OF  CAPITAL 

torious  it  might  be,  such  an  economical  system  was 
certain  to  disappear  when  exposed  to  the  pressure  of 
accumulated  industrial  and  commercial  capital.  Marx 
also  asserts  that  existing  capital,  said  by  economists  to 
be  the  result  of  thrift,  in  reality  owes  its  origin  to  the 
confiscation  of  the  property  of  serfs,  monasteries,  and 
communes,  as  well  as  to  "  protection,"  and  to  the  colonial 
system,  and  that  at  the  present  time  it  is  being  continu- 
ally increased  by  the  unjust  retention  of  a  portion  of  the 
wages  of  labour.  The  plutocratic  evolution  of  capital 
continues,  and  when,  at  a  time  which  cannot  be  far 
distant,  this  evolution  is  completed,  capital,  self-destructive, 
will  find  all  the  world  in  antagonism  to  it.  When  accumu- 
lated capital  has  suppressed  all  its  weaker  competitors, 
when  huge  manufactories  have  swallowed  up  their 
humbler  rivals,  when  great  stores  have  destroyed  the  small 
shops,  when  gigantic  landed  estates  have  absorbed  all 
the  old  patrimonial  properties,  when  almost  the  whole 
population  have  become  either  salaried  officials  or 
labourers,  and  capital  belongs  only  to  joint  stock 
companies  or  to  plutocrats,  then  the  kingdom  of  col- 
lectivism will  be  at  hand.  The  huge  company,  with  its 
concentrated  bureaucratic  organisation,  its  lack  of  a 
master's  supervision,  and  its  thousands  of  workmen,  will, 
it  is  said,  constitute  an  easy  and  natural  means  of 
transition  from  individualism  to  collectivism. 

Such  is  the  idea  which  collectivists  have  evolved  of  the 
existing  capitalistic  society ;  but  the  criticisms  on  which 
they  rely,  some  of  which  are  no  doubt  well  founded,  are 
based  upon  an  incomplete  analysis.  Even  if  in  some  cases 
large  inherited  fortunes  owe  their  origin  to  spoliation,  it 
should  be  remembered  that  the  present  owners  hold  them 
by  prescriptive  right,  which  is  rightly  said  to  be  the 
"  patron  and  protector  of  the  human  race " ;  without  it 
there  could  be  no  social  stability,  nations  would  have 
no  more  right  to  the  possession  of  the  countries  they 
inhabit,  than  individuals  to  the  fields  they  inherit ;  "  pre- 
scription," in  fact,  is  the  only  safeguard  against  continual 
and  universal  warfare.     Again,   if  in   some  cases   long- 


COLLECTIVISM  AND  JOINT  STOCK  COMPANIES   17 

descended  fortunes  can  be  traced  to  confiscation  of  the 
property  of  serfs,  of  monasteries,  or  of  communes,  to 
"protection,"  or  to  the  colonial  regime,  or  if  fraudulent 
speculation  accounts  for  a  certain  number  of  recently 
acquired  fortunes,  it  is  not  by  these  means,  either  now  or 
for  a  long  time  past,  that  private  wealth  has  been  chiefly 
created. 

The  use  made  of  analogy  by  collectivists  is  as  mislead- 
ing as  is  their  interpretation  of  history.  To  believe  that 
the  increase  of  joint  stock  companies  will  pave  the  way 
for  the  establishment  of  collectivism,  is  to  disregard  the 
fundamental  difference  between  private  industry,  even  in 
the  form  of  joint  stock  companies,  and  the  authoritative 
organisation  of  all  industry  by  the  state.  It  is  necessary 
to  insist  upon  this  essential  difference,  because  collectivists 
hope  that  by  ignoring  it,  and  by  asserting  that  their 
system  is  nothing  more  than  a  "  company  "  upon  a  grander 
scale  and  of  wider  scope,  they  may  be  able  to  persuade 
the  public  to  believe  their  doctrines  to  be  capable  of 
practical  application.^ 

^  It  is  often  supposed  that  the  great  trusts  which  have  grown  up 
in  the  United  States  form  a  prelude  to,  and  a  step  towards,  the 
nationalisation  of  industry  or  collectivism,  but  this  view  is  a  super- 
ficial one. 

Great  trusts  are  one  of  the  most  characteristic  and  in  some  ways 
most  triumphant  forms  of  individualism  ;  they  spring  from  a  principle 
altogether  opposed  to  that  of  state  bureaucracy,  and  possess  an 
entirely  different  character.  In  these  great  associations,  an  individual 
or  a  very  small  group  of  individuals,  unusually  able  and  enterprising, 
and  having  an  exceptional  talent  for  combination,  succeed  in 
securing  a  preponderating  control  and  sometimes  a  monopoly  of 
action  in  the  conduct  of  a  great  undertaking.  They  effect  a  radical 
improvement  in  manufacture  and  methods  of  business,  in  such  a  way 
as  to  reduce  the  cost  of  production  and  the  general  expenses.  They 
are  not  restrained  or  hampered  by  meticulous  regulations,  and  they 
derive  immense  personal  gains  from  the  reforms  they  so  completely 
carry  out.  Nothing  could  be  more  opposed  to  the  red-tapism,  the 
indifference,  and  the  lethargy  of  state  administration. 

These  great  trusts,  moreover,  rarely  have  long  lives  ;  they  seldom 
survive  the  active  period  of  the  life  of  the  individual  who  establishes 
them ;  they  are  difficult  to  initiate  and  develop  in  those  countries 
which  depart  but  little  from  the  practice  of  "  free  exchange,"  such  as 

B 


18  COLLECTIVISM  AND  TRUSTS 

England,  and  the  greater  number  of  them  have  but  a  precarious 
existence.  (Cf.  Traite  thhrique  et  pratique  (t]^conomie politique^  V. 
Leroy  Beaulieu,  3rd  ed.,  vol.  iv.,  pp.  41-58). 

Thus  the  organisation  of  great  trusts  and  of  joint  stock  companies 
has  nothing  in  common  with  that  of  the  state,  and  the  multipHcation 
of  the  former  in  no  way  prepares  the  way  for  collectivism.  (Note  to 
the  4th  ed.) 


CHAPTER    III 

Origin  of  private  property  in  land.  Cause  of  increase  in  value. 
Prescriptive  right.  Marx'  indictment  of  personal  property.  Dis- 
tribution of  wealth.  "  Unearned  Increment."  Influence  of  social 
conditions  external  to  the  individual  upon  the  acquisition 
and  ownership  of  wealth.  The  element  of  "  chance  "  or  "  luck." 
Can  collectivism  find  an  efficient  substitute  for  the  incentive  of 
personal  interest  ? 

COLLECTIVISTS  assert  that  capital  under  existing  condi- 
tions has  been  produced  neither  by  thrift  nor  by  the 
intelligence  of  capitalists,  but  that  it  is  in  reality  the  "  plus- 
value"  of  labour  unjustly  retained  by  capitalists.  This 
thesis  is  maintained  by  Marx  with  much  subtlety,  and 
must  be  carefully  examined  in  connection  with  the  origin 
of  capital ;  but  it  will  be  as  well  first  to  consider  the  historical 
aspect  of  collectivist  criticism,  a  question  which  is  only 
referred  to  by  Marx  towards  the  end  of  his  book.  He 
maintains,  but  without  adducing  any  adequate  evidence  for 
the  assertion,  that  private  wealth  owes  its  origin  to  spolia- 
tion. 

Agricultural  wealth,  he  says,  was  derived  from  the 
confiscation  of  church  property  in  the  sixteenth,  and  the 
dispersion  of  state  domains  in  the  following  century,  from 
the  transformation  of  feudal  property  subject  to  state 
charges,  into  "  bourgeois "  property  subject  to  none,  and 
from  continual  encroachments  made  upon  communal 
property,  both  by  large  and  by  small  proprietors.  He 
makes  the  further  statement  that,  under  the  name  of 
"  liberalism,"  the  Revolution  in  England  gave  a  sanction  to 
the  spoliation  of  the  peasant  for  the  benefit  of  the  upper 

19 


20  HOW  LAND  IS  HELD  IN  FRANCE 

classes,  that  land  formerly  subject  to  communal  grazing 
rights  was  brought  under  tillage  for  the  profit  of 
individuals,  then  reconverted  into  pasture  land,  and  in 
some  cases,  as  in  Scotland,  denuded  of  inhabitants  and 
dedicated  to  sport.  It  cannot  be  denied  that  in  respect  of 
the  past  there  is  some  truth  in  these  statements ;  no 
doubt  the  French  Revolution,  which  abolished  feudal  rights 
and  with  them  a  number  of  charges  on  landed  property, 
[originally  imposed  in  the  public  interest],  was  advantageous 
to  most  landed  proprietors ;  ^  but  these  assertions  are 
nevertheless  incorrect  in  three  respects. 

In  the  first  place,  as  previously  pointed  out,  prescrip- 
tive right,  in  respect  of  present  ownership,  must  be 
accepted  as  a  necessary  condition  of  human  society ;  next, 
the  causes  enumerated  are  far  from  supplying  an  adequate 
explanation  of  the  real  origin  of  the  greater  part  of 
existing  landed  property.  In  France  about  half  the  soil 
belongs  to  small  proprietors,  who  obtained  it,  not  by  force 
or  by  unjust  legislation,  but  by  the  patient  exercise  of 
thrift.  From  a  quarter  to  a  third  of  the  land  is  in  medium- 
sized  holdings,  and  not  more  than  a  fifth,  or  at  the  outside 
a  quarter,  is  in  the  form  of  large  properties,  not  half  of 
which  are  now  in  the  possession  of  descendants  of  the 
original  proprietors.  Rural  landed  property,  whatever  its 
extent,  owes  its  present  increased  value  to  labour,  to  thrift, 
to  co-operation,  and  to  the  careful  management  of  its 
proprietors.  If  interest  on  the  capital  sunk  in  the  land 
(calculated  at  a  fair  average  rate)  were  deducted  from  its 
revenue,  there  would  in  most  cases  be  nothing  left,  and 
even  if  any  balance  remained,  it  would  be  very  small. 

It  is  not  necessary  to  go  far  back  in  history  in  order 
to  prove  this,  and  to  show  that  the  net  return  on  the 
majority  of  properties  does  not  give  even  a  moderate  rate 
of  interest  on  the  amount  expended  on  the  soil  and 
buildings,  and  that  during  the  last  fifty  years  landed 
proprietors   have  sunk  more  capital   in  the  soil  than   is 

*  Traitd  de  la  science  des  finances,  P.  Leroy  Beaulieu,  6th  ed., 
vol.  i.,  pp.  358  and  578-84. 


INCREASED  VALUE  OF  LAND  21 

represented  by  the  increase  of  the  saleable  value  of  their 
property.^ 

It  may  be  gathered  from  official  agricultural  returns, 
that  during  the  last  fifty  years  ^  1,882,000  hectares  of  land, 
formerly  common  or  waste,  have  been  brought  under 
cultivation,  whilst  the  area  occupied  by  vineyards,  orchards, 
gardens,  and  fruit  farms,  has  also  largely  increased. 

It  cannot  be  maintained  that  the  increased  value  thus 
created  is  owing  to  the  beneficence  of  nature  and  a 
spontaneous  increase  of  return  from  the  soil,  and  if  during 
so  short  a  period  so  large  an  extent  of  land  has  been 
subjected  to  improved  cultivation,  the  credit  is  due  to 
labour,  to  intelligence,  and  to  thrift,  and  not  to  spoliation 
either  by  force  or  by  legal  artifice.  Besides  the  increase 
of  cultivated  land,  much  advantage  has  been  derived  from 
the  improvement  of  agriculture,  from  the  construction  of 
dams  and  canals  for  irrigation,  and  from  the  great  increase 
in  the  number  of  farm  buildings  of  all  kinds. 

This  is  the  true  explanation  of  the  increased  value  of 
landed  property  in  recent  years,  and  if  the  net  revenue 
from  land  during  this  period  has  also  increased,  the  gain 
cannot  be  attributed  to  the  gratuitous  gift  of  providence, 
but  is  in  nearly  every  case  due  to  the  persevering  labour 
of  small  proprietors,  and  the  intelligent  management  of 
large  landowners. 

In  a  third  respect  also  Marx'  assertions  are  incorrect. 
There  are  many  countries  in  which  land  is  privately  owned, 
but  in  which  no  monasteries  have  ever  existed,  where  the 
domains  of  the  king  or  of  the  state  have  never  been 
distributed  in  gifts,  and  where  there  has  been  no  plunder 
of  communal  rights ;  this  is  the  case  in  all  new  countries, 
in  New  Zealand  and  Australia,  as  well  as  in  the  far  west  of 
Canada,  or  the  United  States.  The  objections  made, 
however,  by  collectivists,  and  even  by  some  economists,  to 
the  method  of  alienating  or  giving  concessions  of  land  in 

'  Essai  sur  la  repartition  des  richesses,  P.  Leroy  Beaulieu,  4th 
ed.,  chapter  iii, 

2  Enquete  dkennale  de  1892  {publiie  en  1897),  2nd  part,  pp.  114, 
115. 


22         PRIVATE  OWNERSHIP  NO  INJUSTICE 

America  and  in  Australia  must  not  be  disregarded ;  they 
contend  that,  in  place  of  perpetual  ownership,  leases  for  a 
term  of  years  only  should  have  been  granted  ;  but  while 
the  vast  allocations  of  land  made  by  the  United  States  and 
Canada  may  be  open  to  criticism  in  this  respect,  it  is 
nevertheless  clear  to  an  impartial  observer,  that  the  actual 
conditions  of  grant  are  by  no  means  unduly  favourable  to 
settlers.  The  proof  of  this  is  that  the  majority  of  the 
"  bourgeoisie  "  and  of  the  so-called  "  proletariat "  in  the 
great  towns  of  America  prefer  to  work  for  wages  rather 
than  to  become  proprietors  in  the  Far  West,  although  the 
cost  of  the  change  would  be  within  the  means  of  millions 
of  their  number.  If  the  acquisition  of  land  were  so  profit- 
able a  business  and  so  certain  to  lead  to  fortune,  as  is 
asserted,  the  young  shopkeepers  and  the  young  artisans 
of  American  towns  would  hasten  to  become  pioneers  and 
proprietors  of  land,  but  nothing  of  the  kind  occurs ;  they 
prefer  to  remain  at  home  and  gain  their  living  by  service 
for  wages,  rather  than  to  become  landowners,  and  there 
can  be  no  doubt  that  the  wage  system,  with  all  its  draw- 
backs, still  appears  to  the  majority  of  Americans  to  be 
a  less  precarious  means  of  living  than  the  possession  of 
virgin  soil. 

Thus  the  alleged  injustice  of  a  system  of  private  owner- 
ship of  land  appears  to  be  either  non-existent  or  negligible. 
The  question  as  to  what,  apart  from  their  origin,  are  the 
respective  advantages  of  the  systems  of  private  or  public 
ownership  of  the  soil,  for  the  community  as  a  whole,  will 
be  considered  later  on. 

Another  part  of  the  collectivist  indictment  relates  to 
personal  property,  and  Marx  imagines  that  this  is  strongly 
supported  by  the  result  of  his  examination  into  the  origin 
of  commercial  capital,^  which,  according  to  him,  is  due 
entirely  to  the  following  causes :  the  colonial  system, 
national  indebtedness,  the  system  of  protection,  the  abuse 
of  child  labour,  dishonest  practices,  and  usury.  It  is 
impossible  to  deny  that  in  some  instances  commercial 
wealth  has  been  amassed  by  fraud,  but  to  assert  that  all 
*  Das  Kapital-^weite^erbesserte  Auflage^  1872,  pp.  781-91. 


ORIGIN  OF  PRIVATE  WEALTH  23 

commercial  wealth  is  derived  from  dishonest  practices,  is 
as  extravagantly  false,  as  it  would  be  to  say,  that  since 
blind  men  and  cripples  are  occasionally  to  be  met  with 
in  the  streets  of  a  town,  the  whole  of  the  population  must 
be  deformed.  Amongst  the  causes  given  by  Marx  as 
being  the  origin  of  private  wealth  are  some  which  are  in 
no  way  censurable ;  for  instance,  the  most  rigid  moralist 
would  not  blame  a  person  who  derives  a  profit  from 
lending  his  money  to  the  state  for  national  purposes.  It 
is  strange  that  Marx  should  include  "  protection  "  amongst 
the  vicious  causes  of  private  commercial  capital,  since  he 
himself,  as  well  as  Schaffle  and  other  collectivists,  far  from 
sharing  the  antagonism  to  "  protection "  entertained  by 
most  economists,  constantly  derides  and  scoffs  at  the 
principle  of  "free  exchange,"  and  professes  to  see  in  it 
nothing  but  an  empty  formula,  void  of  meaning,  used  by 
"  bourgeois  "  theorists  to  mislead  the  simple,  Schaffle  does 
not  hesitate  to  say  that  the  tendency  of  collectivism  is  not 
towards  freedom  of  international  exchange,  and,  as  will  be 
seen  later,  it  is  altogether  repugnant  to  the  collectivist 
system  of  social  organisation. 

If  great  manufacturers  use  their  wealth  to  obtain  an 
increase  of  duty  on  the  articles  they  produce  by  bribing 
legislators  or  electors,  and  thus  secure  profit  for  themselves 
at  the  expense  of  the  consumer,  no  doubt  they  inflict  a 
wrong  on  the  community,  but  a  high  tariff  affects  only  a 
small  and  continually  decreasing  part  of  national  produc- 
tion, and  private  fortunes  can  no  longer  be  attributed  to 
this  source.  Personal  property  acquired  during  the  last 
century  has  a  widely  different  origin  from  this,  as  is  shown 
by  an  enquiry  into  the  source  of  the  annual  increase  of  the 
national  wealth  of  France,  which  amounts  to  two  milliards 
of  francs.  From  this  it  is  clear  that  the  part  played  by 
the  abuses  described  by  Marx  in  the  production  of  this 
saving  is  infinitesimal,  and  that  it  is  in  truth  the  result  of 
labour,  in  which  term  is  included  intellectual  work,  inven- 
tion, co-operation,  and  thrift. 

On  the  subject  of  the  distribution  of  national  income, 
and  the  proportion  borne  by  great  fortunes  to  the  total 


24  DISTRIBUTION  OF  WEALTH 

amount  of  national  wealth,  many  enquiries  have  been  made 
and  much  labour  has  been  expended  by  eminent  econom- 
ists. Although  the  results  obtained  are  necessarily  only 
approximate,  since  absolute  accuracy  on  a  question  so 
complex  is  unattainable,  the  evidence  that  modern  civilisa- 
tion does  not,  as  is  commonly  supposed,  encourage  an 
increasing  concentration  of  wealth,  is  overwhelming,  and 
goes  to  show  that  the  aggregate  of  the  enormous  fortunes 
of  which  we  hear  so  much  hardly  amounts  in  any  country 
to  a  tithe  of  the  national  income. 

It  was  in  England  that  Marx  wrote,  and  from  the 
English  economical  system  that  he  derived  his  inspiration. 
Here  wealth  is  highly  concentrated,  and  artificial  causes, 
historical  antecedents,  and  legal  arrangements  have 
hitherto  restrained  the  tendency  of  modern  civilisation 
towards  a  more  general  distribution  of  wealth  ;  but  the 
publications  of  eminent  English  statisticians,  especially 
those  of  Sir  Robert  Giffen,  have  shown  that  even  in  this 
country  the  years  that  have  passed  since  Marx  wrote  have 
altogether  falsified  his  confident  prediction  that  society 
would  resolve  itself  into  two  groups — a  few  "  plutocrats  "  on 
the  one  side,  the  confused  multitude  of  the  proletariat  on 
the  other :  no  such  sharp  division  exists ;  between  the 
pauper  in  the  workhouse  and  the  richest  London  banker 
there  are  infinite  gradations;  and  if  a  geometrical  figure 
were  constructed  to  illustrate  the  distribution  of  private 
incomes  in  the  United  Kingdom,  it  would  take  the  form 
of  a  regular  pyramid  diminishing  very  gradually  from  the 
base  to  the  apex.^ 

P  With  regard  to  the  distribution  of  national  income,  Sir  Robert 
Giffen  thus  summarised  the  conclusions  to  be  drawn  from  the 
papers  on  the  "  Progress  of  the  Working  Classes  in  the  last  Century," 
read  by  him  before  the  Statistical  Society  in  1883  and  1886  :— 

"Whereas  fifty  years  ago  the  working  masses  of  the  United 
Kingdom,  amounting  to  9  millions,  earned  in  all  about  171  millions, 
or  ;^I9  per  head,  the  working  masses,  now  amounting  to  13  millions, 
earn  about  550  millions,  or  nearly  £i^7.  per  head,  an  increase  of  much 
more  than  100  per  cent. 

"  When  the  increase  of  earnings  from  labour  and  capital  is  com- 
pared, it  is  found  that  the  increase  from  capital  is  from  190  to  400 


ILL-GOTTEN  WEALTH  THE  EXCEPTION     25 

If  in  England  there  is  so  little  justification  for  Marx' 
indictment,  it  is  far  more  trivial  when  made  against  France 
and  Belgium,  or  other  countries  in  which  political  action 
has  destroyed  all  traces  of  the  feudal  system.  It  is  no 
doubt  true  that  some  modern  methods  of  accumulation  of 
wealth  are  as  blameworthy  as  the  violence  of  the  middle 
ages,  and  it  cannot  be  denied  that  a  certain  number  of 
fortunes — far  fewer,  however,  than  is  generally  supposed — 
are  thus  obtained  ;  but  it  is  no  less  true  that  these  are  the 
exceptions  amongst  the  multitude  of  fortunes  laboriously 
and  honestly  gained,  and  are  traceable  to  causes  the 
influence  of  which  will  be  diminished  as  civilisation 
advances ;  they  are  due  either  to  defective  legislation, 
which  does  not  sufficiently  check  fraud  in  the  initiation  or 
management  of  joint  stock  companies,  or  to  the  lack  of 
education,  to  the  carelessness  and  credulity,  which  is 
often  allied  to  cupidity,  of  the  public,  and  the  remedy  lies 
in  the  better  education  and  larger  experience  of  small 
capitalists.  Lastly,  there  is  another  cause,  less  easy  to 
define,  which  will  be  as  potent  under  a  collectivist  as  under 
a  free  regime:  this  is  the  fact  that  humanity  can  never 
liberate  itself  altogether  from  its  defects,  that  there  will 
always  be  men  inclined  to,  and  expert  at,  rascality,  and 
others  always  ready  to  allow  themselves  to  be  duped  and 
despoiled ;  but  when  all  this  is  admitted,  these  exceptions, 
deplorable  as  they  are,  are  not  more  so  than  the  physical 
deformities  or  moral  sufferings,  which  civilisation  cannot 
altogether  remove. 

Besides  their  indictment  of  the  origin  of  certain  classes 
of  private  wealth  upon  historic  grounds,  and  in  addition  to 
the    inferences    they    declare   to    be    derivable    from    an 

millions  only,  or  about  loo  per  cent.  ;  the  increase  from  the  "work- 
ing "  of  the  upper  and  middle  classes  is  from  1 54  to  320  millions,  or 
about  100  per  cent, ;  and  the  increase  of  the  income  of  the  manual 
labour  classes  is  from  171  to  550  millions,  or  over  200  per  cent.  In 
amount,  the  increase  due  to  capital  is  about  210  millions,  to  labour  of 
the  upper  and  middle  classes  166  millions,  and  to  labour  of  the 
manual  labour  classes  379  millions,  a  total  increase  of  755  millions." 
{Essays  in  Finance,  by  Sir  Robert  Giffen,  2nd  series,  2nd  ed., 
P-  472.)] 


26  "UNEARNED  INCREMENT" 

analysis  of  economic  phenomena,  collectivists  assert  that 
private  wealth  is,  to  a  large  extent,  created  by  causes 
which  are  independent  of  the  individual  who  profits  by 
them.  Whilst  they  admit  that  this  may  not  be  altogether 
correct  as  regards  its  origin,  it  is,  they  affirm,  strictly 
true  in  respect  of  the  increments  of  value  due  to 
lapse  of  time  and  as  a  consequence  of  the  progress 
of  civilisation  :  this  increment  or  "  plus-value "  is, 
they  maintain,  but  rarely  owing  to  the  action  of  the 
capitalist  himself.  Ingeniously  handled,  this  argument  is 
no  doubt  a  striking  one ;  the  use  made  of  it  with  reference 
to  the  rent  of  land  since  Ricardo's  time  is  well  known,  and 
it  is  capable  of  application  with  almost  equal  justice  to 
nearly  all  kinds  of  private  wealth.  Mr  Henry  George,  in 
Progress  and  Poverty}  describes  in  sarcastic  terms  the 
fortunate  position  of  the  judicious  purchaser  of  land  on  the 
site  of  a  developing  city  who,  without  personal  exertion, 
profits  by  this  "  unearned  increment,"  and  dwells  upon  his 
life  of  ease  as  contrasted  with  the  lot  of  those  to  whose 
labour  the  constant  increase  of  his  wealth  is  due,  but  who 
themselves  derive  no  advantage  from  their  toil. 

There  is,  however,  another  side  to  the  picture :  it  is 
impossible  to  ascertain  beforehand  whether  some  little 
town  will  develop  into  a  wealthy  city ;  the  purchase  of 
land  in  the  hope  that  it  will  increase  in  value  is  mere 
speculation,  by  which  it  is  probable  that  more  men  have 
been  ruined  than  enriched.  The  assertion  that  it  is  only 
the  owners  of  the  land  who  benefit  by  the  growth  of  a  city 
is  false ;  in  reality  every  citizen  down  to  the  lowest 
labourer  has  a  share  in  its  increasing  wealth.  Priority  of 
settlement  is  almost  as  valuable  to  commerce  and  industry 
as  monopoly  of  situation  is  to  the  proprietor  of  the  soil : 
doctors,  architects,  or  agents  who  by  good  luck  establish 
themselves  in  a  rising  community  secure  a  rapidly  increas- 
ing and  profitable  business,  and  although  no  doubt  they, 
in  common  with  merchants,  will  be  exposed  to  the  com- 
petition which  is  certain  to  follow  in  the  track  of  successful 
trade,  yet  it  follows  but  slowly,  and  the  first  comers  will 

^  Progress  and  Poverty^  by  Henry  George.     New  York,  1879. 


"CHANCE"  27 

have  had  time  to  secure  their  connection  and  will  for  long 
retain  the  advantage  of  priority. 

The  element  of  chance  plays  a  large  part  in  all  human 
undertakings ;  "  unearned  increment "  due  to  no  personal 
merit  or  effort  is  by  no  means  confined  to  the  fortunate 
possessor  of  land  in  an  improving  city,  and  undeserved 
loss  and  ruin  are  as  common  as  unmerited  success.  Who 
has  not  seen  the  growth  of  commercial  or  industrial 
fortunes  of  which  good  luck  was  the  creator?  In  the 
accumulation  of  private  property, "  luck  "  has  almost  always 
a  share ;  it  is  an  element  to  be  reckoned  with,  and  in  human 
affairs  it  stands  on  the  same  footing  as  good  looks  or 
intelligence,  which  in  no  way  depend  upon  the  will  of  the 
individual.  If  man,  with  all  his  diverse  faculties  derived 
from  heredity  and  from  education  and  environment,  is 
analysed,  who  can  determine  which  of  his  qualities  can  be 
fairly  considered  as  being  entirely  due  to  his  own  individu- 
ality ?  Why,  then,  should  "  luck  "  be  considered  as  being  a 
corrupt  source  of  wealth?  It  is  not  only  the  well-to-do 
classes  who  benefit  by  "  luck  " :  the  "  proletariat "  participate 
equally  in  its  favours ;  and  the  question  sarcastically  put 
by  George,  as  to  whether  the  increase  of  wealth  in  a 
growing  city  would  be  likely  to  ameliorate  the  condition 
of  the  labourer,  either  in  respect  of  the  amenities  of  his 
life  or  the  amount  of  his  wages,  can  be  confidently  answered 
in  the  affirmative.  Between  1875  and  1882  wages  in 
Paris  increased  by  50  to  60  per  cent,  whilst  the  cost  of 
living,  with  the  exception  of  house  rent,  remained  un- 
altered. This  great  advance,  therefore,  was  not  attributable 
to  increased  cost  of  living,  nor  was  it  due  to  any  addition 
to  the  hours  of  labour  which,  on  the  contrary,  had  been 
reduced ;  it  was  caused  by  the  growth  of  Paris,  and  the 
advantages  gained  by  the  wage-earning  classes  were  owing 
to  their  good  luck  in  happening  to  live  in  an  improving 
city. 

Again,  if  the  position  of  the  Silesian  miner  earning 
from  IS.  3d.  to  2s.  id.  a  day  is  contrasted  with  that  of  the 
English  miner,  who  receives  from  5s.  to  6s.  8d.,  it  is  obvious 
that  the  better  position  of  the  latter  is  solely  owing  to  the 


/ 


28  PRESCRIPTIVE  RIGHT 

good  luck  which  placed  him  in  a  highly  capitalised  country 
with  an  extended  commerce,  and  in  a  locality  where  his 
work  is  in  demand  and  well  paid  for.  It  may  be  objected 
that  both  capital  and  labour  can  change  their  domicile  ; 
this  is  true,  but  the  process  is  a  slow  one.  The  transfer  of 
capital  involves  risk  and  additional  anxiety,  and  to  quit 
their  native  country  is  to  most  men  an  affliction :  neither 
human  beings  nor  capital  find  their  level  like  liquids  in 
connected  vessels  :  they  do  not  spread  equally  over  all  the 
earth ;  it  is  incontestably  an  advantage  for  a  skilled 
artisan,  such  as  a  cabinetmaker  or  a  jeweller,  to  be  a 
native  of  Paris  or  Berlin  rather  than  of  some  small  village. 
To  take  a  wider  point  of  view,  is  it  not  a  happy  chance  for 
the  French  to  inhabit  the  valleys  of  the  Seine,  the  Loire, 
the  Garonne,  and  the  Rhine,  rather  than  the  Steppes  of 
Central  Asia  ?  But  if  good  luck  is  not  to  be  considered 
as  conferring  a  legitimate  title  to  possession  on  the 
individuals  who  benefit  by  it,  neither  can  it  give  any  right 
to  a  nation  to  retain  the  land  they  occupy,  and  the  French 
ought  to  share  the  rich  pastures  of  Normandy  and  the 
splendid  vineyards  of  Languedoc  or  the  Gironde  with  the 
Esquimaux,  the  Laps,  or  the  Tuaregs ;  for  it  is  not  their 
own  merit  that  has  placed  Frenchmen  in  their  favoured 
land,  it  is  by  luck  alone  that  they  were  born  there,  rather 
than  in  the  north  of  Lapland  or  in  the  Sahara.  That  which 
is  called  "  providence,"  "  luck,"  or  "  chance,"  is  in  no  case 
solely  due  to  merit,  but  it  is  to  this  uncontrollable  power, 
external  to  themselves,  that  nations,  like  individuals,  owe  a 
great  part  of  their  prosperity  and  their  wealth.  The  fact, 
therefore,  that  the  private  property  held  by  an  individual 
is  due  to  good  fortune,  and  not  to  merit,  is  no  valid 
argument  against  his  right  to  possess  it.  It  is  the  title 
conferred  by  prior  occupation  and  by  prescriptive  right, 
which  protects  nations  as  it  does  individuals,  and  which 
justifies  them  in  resisting  the  incursions  and  depredations 
of  nations  less  fortunately  situated.  If  this  title  be  not 
acknowledged,  then  nations  fortunately  placed  ought  in 
justice  to  share  these  advantages  with  those  less  happily 
situated.     Again,  if   social    co-operation  and    conditions 


INFLUENCE  OF  SOCIAL  CONDITIONS         29 

external  to  the  individual  tend  in  certain  instances  to  the 
augmentation  of  private  fortunes,  it  often  happens  that 
they  have  the  contrary  effect,  and  destroy  wealth  labori- 
ously acquired  by  men  who  are  innocent  of  offence. 
There  are  towns  or  parts  of  towns  from  which  prosperity 
has  vanished,  districts  whose  products  have  fallen  in  value 
owing  to  increased  facilities  of  transit  caused  by  the  advent 
of  railways,  discoveries  which  by  the  substitution  of  a 
chemically  manufactured  article  for  a  natural  product  have 
destroyed  an  industry,  as  in  the  case  of  the  discovery  of 
alizarine  and  its  effect  upon  the  cultivation  of  madder. 
Illustrations  of  this  statement  might  be  indefinitely  multi- 
plied :  some,  indeed,  are  almost  classical,  as,  for  instance, 
the  destruction  of  the  industry  of  copying  manuscripts, 
caused  by  the  advent  of  printing,  the  ruin  of  the  great  inns 
built  upon  the  coaching  roads,  and  of  the  posting  business, 
caused  by  the  construction  of  railways,  or  the  effect  of  the 
substitution  of  coal  for  wood  fuel  upon  the  iron  industry, 
or  the  replacement  of  sailing  ships  by  steamers.  Another 
example  is  afforded  by  the  reduction  of  incomes  of 
investors  due  to  increasing  prosperity,  which  enables  a 
nation  to  reduce  the  rate  of  interest  it  has  to  pay  for 
public  loans. 

The  assertion,  therefore,  that  social  conditions  external 
to  the  individual  necessarily  conduce  to  the  increase  of 
private  wealth  is  incorrect :  their  effect  is  quite  as  likely  to 
be  in  the  opposite  direction,  and  this  is  why  it  is  so  rare, 
even  in  the  absence  of  prodigality  or  incapacity,  to  find 
large  fortunes  transmitted  intact  from  generation  to 
generation  for  any  long  period  of  time.  The  truth  that 
luck  plays  a  great  part  in  the  distribution  of  wealth,  and  is 
the  great  leveller,  was  ignored  by  Marx  and  Lassalle  ;  but 
it  was,  to  some  extent,  recognised  by  Schaffle,  who,  with 
curious  ingenuity,  twists  it  into  an  argument  in  favour  of 
collectivism.  According  to  him,  the  impossibility  of  pro- 
viding against  the  innumerable  accidents  which  menace  the 
wealthy,  is  a  good  reason  why  they  ought  to  welcome 
collectivism.  If,  however,  external  social  conditions  are 
so  hostile   to  the  continued   possession   of  wealth,  why 


30  THE  INCENTIVE  OF  COMPETITION 

should  collectivists  represent  capitalists  as  being  a  kind  of 
automata  who,  without  intelligence  and  without  effort, 
infallibly  secure  for  themselves  continual  accretions  of 
wealth  ?  In  reality,  the  hazards  which  attend  all  human 
efforts  perform  a  useful  function  in  our  social  system,  and 
act  as  a  spur  to  exertion :  it  is  the  chance  of  good  fortune 
and  of  exceptional  profit  that  develops  individual  initiative 
to  a  far  greater  extent  than  would  be  possible  under  a 
collective  regime.  In  the  inception  of  great  undertakings 
there  must  always  be  an  element  of  speculation  and  a 
necessity  for  prevision  which,  if  it  cannot  control  the 
future,  endeavours  at  any  rate  to  anticipate  and  provide 
for  possible  contingencies.  It  is  the  hope  that  this  pre- 
vision will  be  successful,  that  is  the  mainspring  of 
enterprise,  and  induces  capitalists  to  risk  their  wealth.  It 
is  true  their  hopes  are  never  entirely  fulfilled,  but  each 
man  confides  not  only  in  his  own  judgment  but  in  his 
"  star,"  an  expression  which  epitomises  man's  reliance 
upon  luck  and  which  will  long  survive  the  pseudo-science 
which  originated  it.  The  more  intelligent  collectivists 
find  themselves  compelled  to  recognise  this  potent 
incentive  to  human  action  ;  and  Schaffle,  although  he  speaks 
of  "  anarchic  competition,"  acknowledges  and  even  eulogises 
the  "  powerful  inflluence  of  capitalistic  competition "  and 
the  "  strength  of  individual  interest,"  whilst  he  recognises 
"  the  inadequacy  of  official  injunctions,"  and  asks  himself 
whether,  with  his  "  social  organisation  of  the  middle  ages," 
with  his  "  committees  of  directors  of  production  and  dis- 
tribution "  and  his  vouchers  for  "  labour  hours,"  it  would 
be  possible  to  retain,  or  if  lost  to  compensate  for,  the 
influence  of  "this  great  psychological  truth  and  the 
economic  fertility  of  the  principle  of  individualism,  in 
accordance  with  which  private  interest  is  urged  to  the 
accomplishment  of  social  functions."  This  question  and 
this  doubt  are  of  extreme  importance.  It  must  be  remem- 
bered that  the  personal  wealth  secured  by  the  originator 
of  the  most  successful  enterprise,  or  the  discoverer  of  the 
most  useful  invention,  is  quite  insignificant  in  comparison 
with  the  gain  to  the  community  generally  resulting  from 


COULD  IT  BE  REPLACED?  31 

their  labour ;  for  instance,  it  is  calculated  that  the  aggre- 
gate sum  of  the  profits  made  by  the  inventor  of 
•*  Bessemer "  steel,  since  the  date  of  his  discovery,  would  . 
only  amount  to  about  ^  per  cent  on  the  total  amount  of 
money  saved  by  his  process.  The  rapid  development  of 
this  great  invention  suggests  a  contrast  with  what  would 
probably  have  happened  if  it  had  been  necessary  to 
submit  it  to  the  officials  of  a  collectivist  regime  and  to 
obtain  the  consent  of  the  bureaucracy  appointed  by  the 
nation  to  direct  its  industries.  It  is  indeed  to  the 
belauded  "  solid  social  organisation  of  the  middle  ages " 
that  the  sterility  of  that  epoch  in  industrial  inventions 
must  be  attributed.  When  inventors  are  compelled  to 
obtain  approval  of  their  ideas  by  committees,  or  to  submit 
them  to  a  corporation  and  get  the  assent  of  the  majority, 
what  likelihood  is  there  that  they  could  overcome  the 
jealousy  of  rivals  or  the  prejudices  and  inertia  of  opinion- 
ated and  indolent  officials  ?  In  almost  all  cases  of  great 
remunerative  enterprises,  it  is  the  same  as  in  the  case  of 
"  Bessemer  "  steel — the  gain  to  the  inventors  or  initiators  is 
small  compared  to  the  gain  to  the  world  at  large.  In  the 
case  of  the  Suez  Canal,  it  is  estimated  that  the  profit  received 
by  the  shareholders  does  not  at  the  present  time  represent 
more  than  from  i  to  2  per  cent,  on  the  economy  effected  in 
transit  by  the  existence  of  the  canal,  and  in  the  not  distant 
future  it  will  not  probably  amount  to  more  than  i  or  even 
\  per  cent. 

Is  it  conceivable  that  the  bureaucratic  organisation  of 
collectivism  can  effectively  replace  the  inventive  fertility 
of  private  enterprise  ?  Schaffle,  who  is  a  conscientious 
writer,  is  compelled  to  admit  that  this  vital  question, 
although  decisive,  is  not  yet  decided,  and  yet  it  is  upon  the 
answer  to  this  question  that  the  possibility  of  a  collectivist 
social  organisation  depends.  If  such  a  rigime  would  dry 
up  the  sources  of  invention  and  enterprise,  the  advantages 
it  offers  would  be  purchased  at  too  high  a  price.  It  is 
noteworthy  that  Schaffle  hesitates  in  the  same  way  when 
he  speaks  of  the  possibility  of  retaining  "freedom  of 
domicile "   and   "  freedom   of  work "   under  a  collectivist 


32       COULD  PERSONAL  LIBERTY  SURVIVE  ? 

regime,  and  dares  not  affirm  that  both  or  either  could  be 
maintained.  We  see,  then,  that  even  one  of  the  most 
capable  exponents  of  the  doctrines  of  collectivism  can 
seriously  propose  that  humanity  should  abandon  its 
most  precious  possessions  —  "  individual  initiative  "  and 
"individual  liberty" — although  he  dares  not  give  any 
assurance  that  compensating  advantages  will  be  secured. 


CHAPTER   IV 

Arguments  against  private  ownership  of  land  founded  upon  natural 
justice  and  historical  precedent.  Development  of  individual 
out  of  collective  ownership  of  land. 

The  preliminary  objections  made  by  collectivist  writers 
to  the  existing  capitalistic  social  system  have  been 
cursorily  dealt  with,  and  a  closer  examination  of  the 
analysis  made  by  Marx  of  economic  phenomena,  such  as 
"value"  and  the  nature  and  origin  of  capital,  is  now 
desirable. 

There  are  two  distinct  theories  of  collectivism,  one  of 
limited,  and  the  other  of  unlimited,  application ;  the 
former  proposes  to  hand  over  or  restore  to  the  state  the 
possession  of  the  land,  mines,  water  power,  and  all  such 
sources  of  wealth  as  are  really  or  apparently  of  natural 
origin,  and  to  deal  with  the  means  of  communication  and 
certain  of  the  larger  industries  in  a  similar  way.  The 
other  theory,  more  thorough  and  more  logical,  advocates 
the  nationalisation  of  all  means  of  production  without 
exception.  These  two  schools  of  collectivist  thought 
entertain  a  profound  contempt  for  each  other ;  the 
thorough-going  collectivists  regard  the  doctrines  of  those 
who  advocate  a  restricted  form  of  state  control  as  being 
puerile,  pusillanimous,  and  illogical,  whilst  the  more 
moderate  party  retort  that  the  system  advocated  by  the 
former  is  "  Utopian"  and  unrealisable,  and  would  lead  to 
the  reversion  of  society  to  barbarism. 

Consider  first  the  more  restricted  form  of  collectivism. 
The   book  by  Henry  George   already  referred   to^  gave 

^  V.  aniCy  p.  26. 

C 


34  NATURAL  JUSTICE— HISTORICAL  PRECEDENT 

an  impulse  to  this  doctrine,  and  several  well  -  known 
economists,  de  Laveleye  amongst  others,^  were 
attracted  by  it.  The  advocates  of  this  kind  of  com- 
munism appeal  both  to  natural  and  to  historic  justice. 
As  a  rule,  they  ignore  the  accumulated  value  added  to 
the  soil  by  successive  generations  of  proprietors,  and  but 
seldom  pay  attention  to  the  social  change  which  has 
substituted  leases  of  greater  or  less  duration  for  perpetual 
ownership,  matters  which  they  appear  to  consider 
negligible  and  not  worthy  of  argument  They  assert  that 
land  is  not,  and  cannot  be,  the  property  of  an  individual, 
that  it  is  res  nullius,  and  is  the  one  thing  that  is  in  its 
essence  common  to  all.  History,  they  declare,  supports 
this  theory,  since  it  shows  that  up  to  a  comparatively 
recent  date,  land,  amongst  all  peoples,  has  been  more  or 
less  common  property. 

These  two  arguments,  the  one  based  on  natural 
justice,  the  other  upon  historical  precedent,  deserve  exa- 
mination, although  the  question  of  the  best  method  of 
utilising  land  for  the  benefit  of  the  human  race  appears  to 
be  one  of  far  greater  importance.  Except  in  uninhabited 
islands,  land,  since  man  existed,  has  never  been  entirely 
res  nullius ;  originally,  as  de  Laveleye  remarks,  it  was 
parcours,  or  hunting-ground.  Take  the  case  of  Australia  : 
here  a  huge  extent  of  land,  capable  of  supporting  fifty  or 
more  millions  of  human  beings,  was  inhabited  by  a  small 
number  of  savages  who  lived  by  the  chase,  each  family 
requiring  for  its  subsistence  an  extent  of  ground  which 
to-day  affords  ample  sustenance  for  several  hundreds,  and 
in  the  future  may  well  support  thousands  of  civilised  men. 
May  it  not  be  said  of  these  vast  regions  thus  thinly  peopled 
by  men  incapable  of  developing  their  natural  resources, 
not  that  such  an  occupation  was  illegitimate,  but  that  it 
was  incomplete  and  provisional  ? 

'  Fawcett  appears  to  admit  that  in  new  countries  the  communal 
system  should  be  maintained.  Gide,  professor  at  Montpelier,  seems  to 
consider  that  real  estate  should  again  become  the  property  of  the 
state,  and  Wallace  is  also  one  of  the  principal  supporters  of  rural 
collectivism  in  England. 


PRIORITY  OF  OCCUPATION  35 

If  the  rights  of  the  colonist  and  of  the  aboriginal 
inhabitant  are  compared,  which  of  the  two  should  be  called 
the  usurper?  The  colonist  appropriates  only  as  much 
land  as  he  can  cultivate,  in  addition  to  a  run  for  his  cattle, 
and  from  this  comparatively  small  area  he  produces 
sustenance,  not  only  for  himself,  but  for  a  large  number  of 
human  beings  in  addition,  whilst  the  indigenous  family 
replaced  by  him,  maintained  a  miserable  existence  by  the 
occupation  of  an  immense  extent  of  ground,  leaving  its 
capabilities  of  production  entirely  undeveloped  ;  the  real 
"  usurper,"  in  fact,  was  not  the  colonist,  but  the  aboriginal 
inhabitant.  Thus,  the  argument  that,  since  land  has  never 
been  occupied,  no  portion,  however  small,  can  be  justly 
appropriated,  is  both  equitably  and  historically  unsound. 
Supposing  that  a  member  of  a  tribe,  existing  solely  by 
hunting,  more  intelligent  than  his  fellows,  becomes  a 
shepherd  or  an  agriculturist,  he  would  require  in  the  one 
case  not  a  tenth,  and  in  the  other  not  a  hundredth  of  the 
extent  of  land  he  would  need  as  a  hunter ;  if,  then,  relin- 
quishing his  share  of  the  tribal  area,  he  should  appropriate 
to  himself  sufficient  land  for  his  changed  method  of  life, 
his  tribe  would  suffer  no  wrong,  but  would  be  actually 
gainers  by  the  considerable  difference  between  the  area 
necessary  for  him  as  a  hunter  and  that  which  would  suffice 
for  his  subsistence  as  a  shepherd  or  agriculturist ;  if  a 
whole  tribe  were  to  act  in  the  way  described,  no  loss  but 
rather  gain  would  accrue  to  neighbouring  tribes  of  hunters, 
who  would  be  relieved  from  its  competition,  and  would 
benefit  by  the  additional  territory  open  to  them  as 
hunting  ground. 

Priority  of  occupation  confers  a  title  to  property,  and 
carries  with  it  the  right  of  voluntary  or  hereditary  trans- 
mission, and  this  title  is  by  general  consent  and  by  mutual 
concession  universally  recognised  as  authentic  and  as 
being  in  harmony  with  the  dictates  of  reason  and  equity  : 
if  this  were  not  the  case,  human  society  would  fall  into  an 
indescribable  chaos.  Under  certain  conditions,  the  title 
conferred  by  prior  occupation  of  land  has  been  the  real 
basis    of   all    civilisation.     Property   in   land,  considered 


36  THE  ELEMENTS  OF  PROPERTY 

generally  and  apart  from  some  unimportant  exceptions, 
rests  upon  three  elements — first,  occupation,  then  cultiva- 
tion, and  lastly,  social  utility.  These  three  elements  will  be 
examined  in  sequence.  If  private  property  is  held  to  be 
illegitimate  on  the  ground  that  an  individual  cannot 
appropriate  that  which  by  its  nature  is  common  to  all,  the 
same  principle  must  be  applied  to  the  ownership  of  land 
by  a  community  or  by  a  nation,  or  by  the  inhabitants  of  a 
continent.  In  each  case  the  title  has  precisely  the  same 
origin — namely,  priority  of  occupation.  Logically,  the 
collectivist  theory  would  involve  the  abolition  of  communi- 
ties and  nations ;  or,  if  we  imagine  the  existence  of  other 
inhabited  worlds,  with  soil  less  fertile  than  that  of  the  earth, 
and  intercommunication  to  be  possible,  the  present 
inhabitants  of  our  little  planet  would  have  no  moral  right 
to  claim  its  exclusive  possession  :  they  would  be  bound  to 
share  their  advantages  with  the  peoples  of  these  worlds, 
since  their  only  title  would  be  that  of  prior  occupation,  the 
legitimacy  of  which  is  denied.  In  equity,  a  circumstance 
carries  with  it  the  same  consequences,  whether  it  applies  to 
one  or  to  many ;  if,  then,  priority  of  occupation  is  held  to 
confer  no  title  upon  the  individual,  neither  can  it  do  so 
upon  a  collection  of  individuals,  however  numerous.  The 
acceptance  of  such  a  theory  would  entail  consequences 
unforseen  by  its  advocates.  If  priority  of  occupation  and 
continuous  labour  do  not  create  a  good  title,  by  what  right 
can  communities  in  possession  of  land  of  exceptional 
fertility  defend  even  the  collective  ownership  of  their 
territory?  The  inhabitants  of  other  less  favoured  lands 
would,  on  this  theory,  have  the  right  to  expropriate  them 
or  to  insist  upon  some  tribute  as  compensation  for  the 
exceptional  advantages  they  enjoy.  What  reply  can  be 
made  by  these  favoured  communities  ?  If  appeal  to  the 
right  conferred  by  occupation  is  of  no  avail  in  the  case  of 
the  individual,  neither  is  it  a  valid  defence  for  a  community ; 
if  they  base  their  defence  upon  the  labour  which  they  have 
devoted  to  the  cultivation  and  development  of  their  land, 
individual  proprietors  can  advance  an  equally  just  claim  to 
their  property.    Thus,  if  this  theory  is  accepted,  nations  in 


PRIVATE  PROPERTY  AND  LIBERTY         37 

possession  of  fertile  lands  would  have  no  good  defence 
against  the  claims  of  poorer  communities  to  a  share  of 
their  advantages.  Some  collectivists  are  prepared  to 
accept  this  consequence,  and  admit  that  the  right  of  a 
commune  to  exclusive  property  in  land  is  no  more  valid 
than  that  of  an  individual.  They  assert  that  the  lot  of  all 
citizens  of  a  nation  ought  to  be  precisely  equal  in  this 
respect :  even  so,  the  dilemma  would  not  be  avoided,  since 
a  nation  has  no  other  or  better  title  to  exclusive  possession 
than  a  commune,  or  than  an  individual :  in  each  case,  the 
elements  of  title  are  the  same,  and  if  the  claim  of  the 
individual  is  disallowed,  a  similar  veto  applies  with  equal 
justice  to  the  claim  both  to  communal  and  to  national 
property.  If  private  ownership  is  to  be  supplanted,  it 
cannot  be  logically  replaced  by  either  communal  or  national 
ownership,  and  the  only  method  of  carrying  out  the  theory 
would  be  by  making  the  whole  world  the  common  posses- 
sion of  the  whole  human  race.  Thus,  a  state  which  denies 
the  right  of  its  citizens  the  individual  ownership  of  land, 
cannot  with  justice  resist  the  claim  of  any  other  state  less 
happily  situated,  and  the  establishment  of  such  a  theory 
would  ultimately  lead  to  the  general  payment  of  tribute  by 
nations  in  possession  of  fertile  territories  to  those  less 
favoured  by  natural  advantages.  The  objection  to  private 
property,  founded  upon  the  nullity  of  title  conferred  by 
priority  of  occupation,  is  therefore  baseless. 

Again,  it  is  argued  that  since  land  is  indispensable  as 
a  means  of  production,  its  possession  is  an  essential 
condition  of  individual  liberty.  Every  man,  therefore, 
ought  to  possess  land,  either  by  effective  occupation  or 
by  representation.  This  reasoning  has  now  lost  much 
of  its  force ;  formerly,  before  the  establishment  of  co- 
operative industry  and  the  division  of  labour,  such  an 
arrangement  might  have  been  advisable,  but  nowadays 
land  is  no  longer  the  one  indispensable  instrument  of 
labour.  Private  property  is  indeed  a  necessary  con- 
dition of  liberty ;  but  it  can  no  longer  be  asserted  that 
to  secure  individual  liberty,  the  effective  or  even  repre- 
sentative possession  of  land  is  necessary.     The  assertion 


38  SHADOW  AND  SUBSTANCE 

that  no  man  is  really  free  unless  he  is  assured  of  his 
future  and  of  his  ability  to  support  himself  without 
support  from  his  fellow-men,  is  obviously  baseless.  A 
member  of  a  tribe  of  hunters  can  have  no  such  assurance  : 
his  subsistence  depends  from  day  to  day  upon  the  con- 
tinuance of  his  bodily  activity  and  the  abundance  of 
game ;  but  it  cannot  be  said  that  this  uncertainty  deprives 
him  of  liberty.  In  the  same  way,  men,  under  the  existing 
social  system,  are  free,  although  they  also  are  equally 
subject  to  the  changes  and  chances  of  this  mortal  life. 
Liberty,  indeed,  does  not  demand  so  impossible  a  condi- 
tion as  a  guaranteed  security  against  the  risks  of  life: 
its  essential  elements  are  freedom  of  choice  and  action. 
If  the  possession  of  land  is  to  be  a  necessary  condition 
of  liberty,  it  is  obvious  that  the  human  race  can  never 
be  free,  since,  with  the  growth  of  population,  it  would 
become  increasingly  impracticable  for  each  man  to  hold 
sufficient  land  for  his  support.  Intelligent  collectivists, 
however,  do  not  propose  this ;  they  offer  to  individuals 
a  kind  of  ideal  possession,  which  is  to  real  ownership 
as  the  shadow  is  to  the  substance.  The  system  by 
means  of  which  they  propose  to  bestow  this  ideal  owner- 
ship, is  that  the  state  should  own  the  land  and  lease  it 
for  the  benefit  of  the  community ;  but  under  such  an 
arrangement  the  individual  would  be  no  more  the  owner 
than  he  is  now — he  would  have  no  power  to  use  the  land 
for  his  own  subsistence,  except  by  agreement  with 
the  tenant  farmers  of  the  state,  who  would  have  no 
motive  for  acting  differently  from  the  farmers  who  now 
hold  leases  under  individual  proprietors.  This  "  ideal 
possession"  is  indeed  a  mere  delusion,  and  could  in  no 
way  satisfy  the  formula  that  property  in  land  is  a  condi- 
tion of  liberty. 

Are  collectivists,  then,  more  fortunate  in  the  arguments 
they  derive  from  history  than  in  those  they  base  on 
natural  justice?  Can  they  find  there  any  proof  that 
collective  property  is  the  true  system  for  a  free  people  ? 
History  indeed  makes  one  fact  clear — namely,  that  as 
property  in   land   gradually  ceased  to  be  collective  and 


PRIVATE  OWNERSHIP  A  USURPATION       39 

became  individual,  agricultural  methods  improved  and 
production  increased :  these  two  phenomena  are  found  in 
all  countries,  and  occur  simultaneously ;  and  the  question 
whether  this  relation  is  that  of  cause  and  effect,  or  is 
merely  fortuitous,  is  one  of  much  importance. 

According  to  collective  authors,  private  property  in 
land  is  a  usurpation  of  the  collective  ownership  which 
was  the  ancient  and  normal  custom  :  they  point  out  that 
formerly  land  was  the  common  property  of  the  tribe  or 
the  clan,  and  that  at  even  the  present  time  this  system 
still  continues  amongst  peoples  uncontaminated  by 
modern  civilisation.  The  eminent  publicist  de  Laveleye 
has  supported  this  assertion  with  much  learning  and 
ingenuity,  and  although  no  doubt  he  would  repudiate 
the  appellation  of  "  collectivist,"  yet  that  party  can  with 
justice  claim  him  as  an  ally,  since  one  of  his  most  original 
works  is  in  effect  an  indictment  of  the  existing  system 
of  private  ownership  of  land.^  In  this  book  he  describes 
the  ancient  systems  of  land  tenure  from  all  points  of  view. 

The  fact  that  what  has  been  exists  no  longer,  is  in 
itself  an  indication  of  some  defect;  if  collective  owner- 
ship so  fully  secured  justice  and  content,  how  is  it  that 
it  has  so  generally  disappeared?  Its  destruction  has 
not  been  the  result  of  accident,  for  accident  is  essentially 
local  and  limited,  whereas,  with  insignificant  exceptions, 
collective  proprietorship  has  vanished.  Its  advocates  are 
compelled  to  recognise  the  fact  that  over  the  whole 
inhabited  surface  of  the  globe,  a  slow,  progressive  change 
has  taken  place,  the  effect  of  which  has  been  to  substitute 
individual  for  collective  ownership  of  land.  So  long  as 
people  lived  by  hunting,  collective  ownership  of  land 
was  obviously  the  only  possible  system,  but  history  shows 
that  neither  then  nor  later,  when  the  change  to  a 
pastoral  regime  took  place,  did  this  system  secure  peace 
and   content.      Competition    for   the   best   land   was   the 

^  6mile  de  Laveleye,  La  propriite  et  ses  formes  primitives. 

Malon,  formerly  a  member  of  the  "Commune  de  Paris," 
translator  of  Schaffle  and  Lassalle,  refers  to  de  Laveleye  as  an 
aiixiliary  of  collectivism. 


40  OWNERSHIP  AND  AGRICULTURE 

cause  of  constant  warfare  between  tribes  and  nations, 
and  during  the  middle  ages,  as  well  as  in  ancient  times, 
pastoral  communities  were  a  constant  menace  to  their 
more  civilised  neighbours.  By  slow  degrees  portions 
of  the  land,  which  in  the  hands  of  a  pastoral  people 
yielded  only  such  return  as  was  spontaneously  produced, 
became  regularly  cultivated,  and  an  agricultural  system 
was  established.  At  first  cultivation  was  entirely 
communal,  later  the  land  was  divided  and  allotted 
annually  to  individuals,  then  a  further  step  was  taken, 
and  in  place  of  an  annual  division,  the  allotments  were 
made  for  a  period  of  years.  It  happened  occasionally 
that  the  same  family  would  remain  in  continuous  occupa- 
tion of  the  same  lot,  which  thus  came  to  be  considered 
as  their  own  property,  and  so  in  process  of  time  a  system 
of  private  possession  of  land  was  evolved,  and,  once 
initiated,  it  continually  spread,  until  it  became  the  general 
custom.  The  cause  of  this  transformation  and  of  the 
rapid  extension  of  private  ownership  is  clearly  pointed 
out  by  de  Laveleye,  who  is  compelled  to  admit  that 
the  improvement  of  agriculture  progressed  pari  passu 
with  private  ownership  —  an  admission  which  strongly 
suggests  the  presumption  that  this  system  is  the  most 
beneficial  for  the  human  race,  a  thesis  which  is  confirmed 
by  examination  of  the  various  systems  of  collectivist 
land  tenure. 


CHAPTER  V 

Existing  systems  of  collective  ownership  of  land. 

No  institution  is  more  frequently  cited  as  an  illustration 
of  the  advantages  of  collective  ownership  than  the  Russian 
"  Mir."  ^  In  Russia  all  land  which  is  not  owned  by  the 
crown  or  by  the  nobility  is  the  common  property  of  the 
community,  and  in  that  country  communes  possess  a 
greater  degree  of  autonomy  than  in  the  East ;  they  are 
responsible  to  the  state  for  taxes  and  recruits,  but  enjoy 
complete  self-government.  The  heads  of  families,  meeting 
under  the  presidency  of  the  "  starosta,"  or  mayor,  who  is 
elected  by  them,  discuss  and  regulate  all  communal  affairs. 
The  "starosta"  is  chief  of  police,  and  judge  in  case  of 
breaches  of  the  law.  The  aggregate  of  the  inhabitants  of 
a  village  possessing  the  land  in  common  is  known  as  a 
Mir,  an  old  word  which  is  equivalent  to  commune.  In 
principle,  every  male  inhabitant  of  full  age  has  an  equal 
share  in  the  Mir. 

True  collective  ownership  implies  communal  cultiva- 
tion, which  necessitates  an  irksome  routine,  and  involves 
the  complete  suppression  of  individual  initiative  and 
personal  interest ;  in  the  Mir  this  method  of  cultivation 
has  long  been  abandoned — the  common  land  is  divided 
into  small  plots  which  at  varying  intervals  are  divided 
either  by  lot,  or  are  allocated  according  to  some  other 
system,  amongst  its  members.    Under  such  an  arrangement, 

*  For  a  complete  study  of  the  "  Mir,"  see  L Empire  des  Tsars  et 
les  Russes,  by  Anatole  Leroy  Beaulieu,  vol.  i.,  2nd  ed. 

41 


42  THE  "MIR^ 

no  man  has  a  lasting  interest  in  the  land  allotted  to  him, 
the  practice  of  a  due  rotation  of  crops  is  impossible,  and, 
since  each  one  knows  that  after  a  longer  or  shorter  period 
the  result  of  any  extra  toil  and  care  he  may  bestow  on 
his  land  will  be  lost  to  him  and  his  family,  it  is  not  to  be 
expected  that  he  will  do  more  than  is  necessary  to  secure 
a  bare  subsistence.  The  strong  incentive  of  personal  and 
family  interest  which  impels  the  French  peasant  proprietors 
to  lavish  thought  and  toil  on  the  improvement  on  their 
little  plots  of  ground  is  here  entirely  wanting.  To  increase 
the  interval  between  the  periodical  divisions  would  be  no 
remedy.  Formerly  the  division  took  place  every  year ; 
now,  according  to  de  Laveleye,  the  period  is  from  six  to 
nine  years,  but  the  longer  the  interval  (de  Laveleye  suggests 
eighteen  or  twenty  years)  the  greater  would  be  the  viola- 
tion of  the  principles  on  which  the  Mir  is  founded,  and 
the  greater  would  be  the  difficulty  of  providing  for  new- 
comers. Whatever  device  might  be  adopted,  the  economic 
objections  to  the  Mir  would  remain  immense ;  the 
work  of  Anatole  Beaulieu  referred  to  above,  and  the 
admissions  of  de  Laveleye,  show  that  this  system  possesses 
no  moral  advantages  to  compensate  for  the  economic 
evils  it  produces. 

The  rural  proletariat  co-exists  with,  and  is  produced  by, 
the  Mir,  and  its  evils  are  even  less  remediable  than 
under  any  other  system ;  its  ranks  are  recruited  by  those 
who,  returning  after  unsuccessful  emigration,  have  lost 
their  rights  of  membership  of  the  Mir,  and  by  those  who, 
remaining  in  the  commune,  possess  neither  a  horse  nor 
any  other  agricultural  capital.  The  industrious  workman 
has  no  means  of  utilising  his  surplus  labour ;  his  own  "  lot " 
is  no  larger  than  that  of  his  indolent  neighbour,  and  if 
he  bestows  extra  labour  upon  it,  the  result  will  be  lost 
at  the  next  partition.  He  cannot  hire  out  his  own 
labour,  since  each  man  cultivates  his  own  ground,  and  it  is 
only  on  the  seignorial  estates  that  he  can  obtain  paid 
employment. 

The  Russian  peasant,  in  spite  of  his  "  lot,"  perhaps  in 
consequence   of  it,  is   more   in   debt  than    the   peasants 


USURY  4S 

of  the  West,  and,  being  unable  to  give  adequate 
security,  is  compelled  to  pay  a  higher  rate  of  interest. 
When  the  more  intelligent  and  astute  peasants  succeed 
in  amassing  some  personal  wealth,  the  only  employment 
they  can  find  for  it,  under  this  system,  is  "  usury,"  un- 
restricted and  unashamed.  These  men  are  described  in 
Russian  as  "  eaters  of  the  Mir,"  and,  being  unable  to  use 
their  means  either  in  the  employment  of  labour  in  creat- 
ing new  sources  of  wealth,  or  in  the  direction  of  enterprise, 
they  play  the  role  of  the  Jew  of  the  middle  ages,  and  thus 
in  time  inequality  of  social  condition  is  created. 

There  are  other  ways  also  in  which  this  system  leads 
to  the  degradation  of  its  members,  as  appears  from  the 
following  account  of  the  Mir  of  Arachine,  given  by 
Anatole  Beaulieu.  He  divides  the  families  in  this 
Commune  into  four  classes.  The  first  comprises  those  who, 
"owing  to  default  of  workers  or  to  the  want  of  agricultural 
implements,  are  incapable  of  the  profitable  cultivation  of 
land  or  of  supporting  any  portion  of  the  communal 
charges."  Out  of  eighty-seven  families  in  Arachine,  three 
belong  to  this  class.  They  are  excluded  from  all  participa- 
tion in  profit,  and  are  relieved  from  all  imposts.  In 
Russian  phraseology,  "  they  are  without  souls."  After 
these  "  soulless "  families  come  the  class  of  those  who 
are  weak  or  incompetent,  who  include  an  able-bodied 
labourer,  but  are  unprovided  with  that  indispensable 
auxiliary  of  the  farmer,  a  horse.  Of  these  families  there 
are  ten,  they  each  receive  only  one  "  lot,"  and  are  taxed 
as  one  "  soul."  To  the  third  and  far  more  numerous  class 
belong  the  households  which  have  one  labourer  and  one 
or  two  horses  ;  these  each  pay  imposts  as  two  "  souls,"  and 
hold  two  "  lots."  Lastly,  to  the  number  of  thirty,  come  the 
most  numerous  and  the  wealthiest  families,  each  cultivating 
more  than  two  "  lots,"  generally  three  or  four,  some  five  or 
even  five  and  a  half,  and  who  are  taxed  accordingly. 

"  An  unlooked  for  result  of  this  method  of  distribution, 
is  that,  under  a  procedure  in  appearance  so  entirely 
collectivist,  it  is  not  the  personal  ability  of  the  labourer  that 
constitutes  a  preferential  claim  to  land,  but  the  resources 


44  PEASANTS  WITHOUT  "LOTS'' 

of  which  he  can  dispose;  of  a  Mir  such  as  that  of 
Arachine,  it  might  almost  be  said  that  it  is  "  capital "  that 
gives  a  claim  to  the  soil,  and  that  the  land  is  allotted 
preferentially  to  those  who  possess  the  best  means  for 
making  the  most  of  it."  ^ 

A.  Beaulieu  says  elsewhere  that  in  the  Government  of 
Kostroma  98,000  peasants  are  without  lots,  in  that  of 
Tambof  94,000,  and  in  that  of  Koursk  77,000 ;  and  with 
much  justice  he  concludes :  "  The  evil,  it  appears,  can 
only  increase ;  families  quitting  their  village  communities 
cannot  regain  access  to  them  except  by  paying  for  the 
right  of  re-entry,  divisions  (of  land)  are  almost  everywhere 
becoming  less  and  less  frequent,  and  the  lots  distributed 
more  and  more  exiguous,  owing  to  the  mere  fact  of  the 
increase  of  population  ;  collectivist  ownership  is  thus  doubly 
convicted  of  inefficiency,  of  ability  to  put  land  within  the 
reach  of  all,  and  of  incapacity  to  raise  the  families  whom 
it  endows  with  land  from  misery."  The  Russian  Mir, 
then,  offers  no  social  advantages  to  compensate  for  the 
serious  economic  evils  it  involves.  It  is  destructive  of 
individual  initiative,  it  closes  the  door  against  the  useful 
employment  of  capital,  and  it  discourages  the  exercise  of 
thrift. 

These  observations  made  by  Anatole  Beaulieu  receive 
striking  confirmation  in  a  communication  from  the  St 
Petersburg  correspondent  of  the  London  Times^  published 
by  that  paper  on  loth  November  1902  under  the  title  of 
"The  Russian  Village  Commune."  In  this  article  it  is 
pointed  out  that  since  the  appointment  of  a  special 
committee  under  the  presidency  of  Witte,  a  tendency 
to  advocate  the  abolition  of  the  Mir  has  become  more 
and  more  evident.  It  is,  indeed,  only  the  reverence  in 
which  all  ancient  Muscovite  customs  are  held  in  Russia 
which  now  protects  this  institution. 

An  important  Russian  journal,  the  Novoye  Vremya,  also 

brings  forward  evidence,  from  which  it  appears  that  the 

peasants  themselves  are  by  no  means  so  enamoured  of  this 

institution  as  its  admirers  assert.     As  a  general  rule,  the 

^  A.  Beaulieu,  op.  cit.^  vol.  i.,  p.  529. 


THE  PEASANT  AND  HIS  MIR  45 

opinions  of  peasants  asked  by  local  agricultural  com- 
missions have  been  unfavourable  to  the  Mir.  A 
memorandum  upon  this  question  has  been  addressed  by 
Ivan  Polyahoff,  a  peasant  of  the  province  of  Novgorod,  to 
the  Russian  Minister  of  Finance,  in  which  he  cites  his  own 
village  as  an  example  which,  as  he  knows  from  his  frequent 
travels  in  Russia,  differs  in  no  way  from  others.  This 
village  consists  of  170  holdings,  and  has  not  to  complain  of 
want  of  land. 

The  average  distance  of  the  peasant's  cottage  from  his 
"  lot "  is  about  two  miles,  and  owing  to  this  fact  a  large 
addition  is  made  to  the  average  distance  to  be  traversed 
by  the  cultivator,  which  adds  considerably  to  the  cost  of 
production.  Ivan  Polyakoff  further  declares  that  the 
peasant  does  not  look  upon  the  land  as  his  own,  but  as 
belonging  to  unknown  persons  or  to  the  government,  a 
belief  which  deprives  him  of  any  desire  to  improve  it.  A 
third  of  the  property  of  the  commune  is  composed  of  use- 
less land,  hill,  or  marsh ;  the  hills  were  formerly  covered  with 
woods,  but  the  peasants  have  exhausted  them.  It  would 
be  easy  to  drain  the  marshes,  but  the  Mir  has  no  funds, 
and  there  are  difficulties  in  the  way  of  obtaining  money 
on  loan,  or  of  getting  the  work  done  by  the  forced  labour 
of  the  members  of  the  commune.  He  asserts  that  those 
peasants  who  have  the  full  ownership  of  marshy  or  forest 
land,  show  far  more  thrift  in  the  management  of  the  woods 
and  far  greater  energy  in  improving  the  marshes.  Where 
the  land  is  communal  and  is  divided  from  time  to  time, 
the  peasants  are  compelled  to  live  in  cottages  so  arranged 
as  to  form  one  street,  which  greatly  augments  the  danger 
from  the  fires  so  frequent  in  Russia.  He  himself  now 
inhabits  his  third  house,  and  remembers  two  large  fires  in 
his  village,  when  82  cottages  were  burnt.  In  conclusion, 
Polyakoff  maintains  that  to  obtain  economical  improve- 
ment in  the  condition  of  the  peasants,  they  must  be 
liberated  from  the  yoke  of  the  commune. 

Relics  of  a  system  of  collective  property  are  still  to  be 
found  in  some  of  the  more  remote  and  mountainous 
parts  of  Switzerland.    De  Laveleye  writes  :  "  The  minister 


46  THE  ALLMEND 

Becker  believes  that  in  the  '  All  mend  '  he  has  discovered 
the  solution  of  the  social  question,  and  I  fully  agree  with 
him  :  not  that  it  is  always  possible,  as  at  Stanz,  to  provide 
every  one  with  1400  'klafter'^  of  good  ground,  but 
because  the  Allmend  is  the  antique  type  of  the  true 
system  of  land  tenure,  which  ought  to  be  the  basis  of  future 
society."  ^ 

The  Allmend  is  a  system  of  collective  land  tenure 
peculiar  to  Switzerland.  De  Laveleye  says  that  he  has 
found  much  difficulty  in  collecting  materials  for  a  study  of 
it:  this  is  in  itself  an  admission  which  shows  that  the 
system  is  not  widely  spread  or  well  established  ;  it  is  to  be 
found  only  in  the  cantons  of  Uri,  Glaris,  Unterwald, 
Soleure,  Appenzell,  and  Le  Valais — more  especially  in  the 
three  first  named.  The  word  "  Allmend  "  appears  to  mean 
the  "domain  common  to  all."  This  domain  consists  of 
forest,  grass,  and  cultivated  land  {wald,  weide,  und  feld), 
and  is  thus  able  to  provide  the  primitive  requirements  of 
life,  peat  for  fuel,  wood  for  construction  and  burning, 
summer  pasturage,  and  cultivable  ground ;  the  co-existence 
of  these  capabilities  in  one  locality  is  unusual,  and  is  only 
to  be  found  amongst  mountain  ranges.  The  cultivable 
land  assigned  to  each  family  of  the  Allmend  is  small  in 
extent,  at  most  80,  usually  not  more  than  10  to  15  ares, 
and  is  generally  used  for  the  cultivation  of  vegetables  and 
fruit ;  it  provides,  therefore,  only  a  small  part  of  the 
necessary  subsistence.  This  land  is  periodically  divided 
and  allotted.  To  be  an  inhabitant  of  the  commune,  or 
even  to  exercise  rights  of  political  citizenship,  is  not  a 
sufficient  qualification  for  membership  of  the  Allmend : 
it  is  necessary  to  be  descended  from  a  family  which  has 
possessed  this  right  from  time  immemorial,  or  at  all  events 
from  a  date  anterior  to  the  commencement  of  this  [the 
nineteenth]  century.  This  restriction  is  both  logical  and 
necessary :  logical  because  the  descendants  of  the  ancient 
clan  have  an  hereditary  claim  to  a  share  in  the  Allmend, 

^  1400  klafter  represents  45  ares,  an  "are"  =  100  square 
metres. 

*  De  Laveleye,  op.  cit.^  p.  282. 


PERPETUATES  INEQUALITY       47 

and  necessary,  because  the  share  of  each  member,  already 
small,  would  become  indefinitely  less  if  new  co-partners 
were  admitted.  Thus,  in  the  same  village  some  of  the 
inhabitants  are  full  members  of  the  Allmend,  whilst 
others  are  excluded  from  it.  Between  these  two  classes 
of  persons,  who  often  live  side  by  side  for  many  genera- 
tions, but  who  possess  unequal  privileges,  strife  is  frequent 
and  prolonged.  The  system,  therefore,  does  not  secure 
equality  ;  on  the  contrary,  it  perpetuates  inequality.  With 
the  object  of  mitigating  this  trouble,  certain  restricted 
forest  rights  are,  in  some  places,  granted  to  inhabitants 
who  are  not  members  of  the  Allmend,  but  who  have 
long  been  established  in  the  district.  This  concession 
modifies,  but  does  not  abolish  the  inequality. 

Speaking  of  the  method  of  administration  of  the 
Allmend,  de  Laveleye  says^  that  in  former  times,  when 
the  population  was  small  compared  to  the  extent  of 
land,  no  regulations  were  necessary — each  member  used 
timber  as  he  required  it,  and  pastured  as  many  beasts  as 
he  possessed ;  but  later,  when  the  number  of  co-partners 
became  too  large  to  allow  of  this  unlimited  user,  regulations 
were  imposed,  which  became  more  precise  and  stringent 
as  the  necessities  of  the  community  increased.  At  the 
present  day  the  regulations  of  the  Allmenden  vary 
considerably  in  different  localities ;  some  features  are, 
however,  common  to  all ;  when  villages  have  grown  into 
towns,  the  participation  of  the  members  in  natural 
advantages,  with  the  exception  of  forest  rights,  has 
generally  disappeared.  In  these  cases  the  communal 
lands  are  let  to  defray  public  expenses,  and  the  proprietor- 
ship of  the  soil  by  each  member  is  only  nominal.  In  those 
communes  which  have  remained  rural,  the  methods  of 
user  may  be  reduced  to  three  typical  forms  to  be  found  in 
the  cantons  of  Uri,  Valais,  and  Glaris. 

In  1852,  according  to  de  Laveleye,  Uri,  with  2700 
families,  possessed  5417  "kuhessen,"- communal  woods  of 
the   value   of    4,000,000   fr.,    and    400  hectares   of  culti- 

*  De  Laveleye,  op.  cii.,  p.  280. 

2  A  "kuhess"  is  the  feed  for  a  cow  during  the  summer. 


48  AND  EXCLUDES  THE  POOR 

vable  land  at  the  disposal  of  the  Allmenden.  The 
division  of  this  property  amongst  the  co-partners  was  by 
no  means  equal,  the  rule  being — "  to  each  one  according 
to  his  wants  " ;  this  formula,  however,  is  not  to  be  taken  as 
referring  to  personal  wants,  but  to  the  capabilities  of  the 
capital  possessed  by  each  ;  thus  the  greater  the  wealth  of 
the  member,  the  larger  would  be  his  share  of  the  common 
property.  Schaddorf,  a  village  near  Altdorf,  is  cited  as  a 
typical  example  of  this  method  of  division.  In  respect  of 
forest  rights,  the  members  of  the  Allmend  in  this  village 
are  divided  into  four  classes.  The  first  class,  120  in 
number,  consist  of  those  members  who  have  had  fire  and 
light  throughout  the  year,  who  use  an  oven,  and  who 
possess  private  property ;  these  are  entitled  to  six  large 
pine  trees.  The  second  class,  30  in  number,  includes  those 
who  have  had  fire  and  light  and  an  oven,  but  have  no 
private  property ;  they  have  a  right  to  four  trees.  The 
third  class,  9  in  number,  are  those  who  live  alone 
and  possess  no  property ;  they  are  entitled  to  three 
trees.  And  finally,  in  the  fourth  class  are  those  who  have 
fire  and  light  but  no  private  dwelling;  they  are  25  in 
number,  and  are  only  entitled  to  two  trees  each. 

No  member  can  add  to  his  house  or  farm  buildings 
without  the  consent  of  the  authorities ;  the  reason  for  this 
restriction  being  that  since  the  timber  required  is  supplied 
out  of  the  common  property,  it  is  to  the  interest  of  the 
community  that  the  demand  should  not  be  excessive. 
The  division  of  the  mountain  pasturage  is  even  more 
unequal  than  that  of  the  forest  rights.  It  is  an  accepted 
principle  in  Uri  that  each  member's  share  of  his  pasture 
shall  correspond  to  the  extent  of  his  private  property,  and 
the  rule  is,  that  each  shall  be  entitled  to  send  to  the 
common  pasturage  as  many  beasts  as  he  can  keep  through 
the  winter.  This  rule  excludes  the  poor  and  favours  the 
well-to-do,  in  direct  proportion  to  the  amount  of  their 
wealth.  Here,  as  elsewhere,  we  find  the  population 
divided  into  rich  and  poor ;  and  what  socialists  term  the 
contraste  pauperiste  is  to  be  found  even  in  these  remote 
places,  which,  we  are  told, "  exhibit  to-day  a  faithful  picture 


THE  INTEREST  OF  THE  COMMUNITY        49 

of  the  primitive  life  of  our  ancestors  upon  the  plateaus  of 
Iran." 

In  Uri,  according  to  de  Laveleye,  the  rich  families 
outnumber  the  poor ;  1665  families  possess  cattle,  against 
1036  who  do  not;  these  latter  claimed  a  more  equal 
division  of  the  common  property,  but  were  unsuccessful : 
ultimately  the  occupation  of  from  15  to  20  ares  of  land, 
subject  to  periodic  re-allotment,  not  the  fiftieth  or  the 
hundredth  part  of  the  extent  necessary  for  the  subsistence 
of  a  family,  was  given  to  each  of  these  poorer  members,  as 
well  as  wood  for  cooking  and  firing. 

This  is  the  first  type  of  Allmend.  Three  classes  are 
to  be  met  with  in  these  villages.  First,  those  who,  although 
they  may  have  lived  in  the  district  for  many  generations, 
are  not  descended  from  the  ancient  members  of  the  clan, 
and  therefore  have  no  claim  upon  the  communal  property ; 
secondly,  the  poorer  members  of  the  Allmend,  who,  since 
they  possess  no  property  and  are  unable  to  maintain 
cattle  during  the  winter,  are  excluded  from  any  share  of 
the  pasturage,  but  participate  to  some  extent  in  the  forest 
rights,  and  also  enjoy  upon  a  precarious  tenure  the 
occupancy  of  15  to  20  ares  of  land ;  and  lastly,  those 
well-to-do  members,  who,  in  addition  to  their  share  of  the 
arable  land,  profit  by  the  pasturage  and  the  forest  rights 
in  direct  proportion  to  their  wealth. 

Thus,  under  this  collectivistic  regime,  the  more  wealthy 
families  obtain  the  larger  share  of  the  common  property, 
and  this  arrangement  is  clearly  advantageous  to  the 
community,  whose  object  must  be  to  obtain  the  largest 
possible  return  from  the  soil. 

Glaris  is  an  example  of  another  type  of  Allmend. 
Here  the  greater  portion  of  the  land  is  let  in  farms,  some- 
times to  strangers,  but  a  certain  portion  is  retained  for 
division  amongst  the  members  in  lots  of  from  10  to  30 
ares,  which  are  held  for  periods  of  from  10  up  to  30 
consecutive  years,  after  which  the  lots  are  remeasured  and 
subjected  to  a  fresh  lottery.  Glaris  possesses  some  com- 
munal vineyards  and  wheatfields,  but  these  are  used 
solely  for  the  purpose  of  supplying  wine  and  bread  for 

D 


50  DIFFICULTIES  OF  SYSTEM 

national  or  communal  f^tes.  Some  of  the  rifle-shooting 
associations  also  hold  some  plots  of  land  for  a  similar 
purpose ;  but  these  customs,  estimable  and  poetic  as  they 
are,  can  have  no  material  influence  upon  the  condition  of 
the  inhabitants. 

In  the  canton  of  Valais,  as  in  Uri  and  elsewhere,  the 
mountain  pasture  is  allotted  in  such  a  way  as  to  augment 
the  private  wealth  of  the  well-to-do  members  of  the 
Allmend. 

It  is  unfortunate  that  no  statistics  exist  which  give  the 
communal  property  for  the  whole  of  Switzerland.  De 
Laveleye,  however,  gives  figures  relating  to  those  cantons 
possessing  the  largest  extent  of  communal  property,  which 
varies  considerably  in  the  different  cantons.  The  All- 
mend  system  is  largely  in  force  in  the  cantons  of  Uri, 
Zug,  and  Schwytz.^ 

Of  the  forests  by  far  the  larger  part  (20,588  jucharts 
out  of  a  total  of  29,188)  is  communal  property,  whilst  in 
France  the  state  and  the  communes  together  own  only 
about  half  the  total  area  of  forests  and  waste  lands. 
Examination  of  the  figures  given  by  de  Laveleye  shows 
that  even  in  those  cantons  which  have  the  largest  extent, 
the  area  of  communal  land  is  but  small  when  considered  in 
relation  to  the  number  of  the  inhabitants,  and  that  the 
revenue  derived  from  the  Allmenden,  at  any  rate  by 
their  poorer  members,  is  quite  insignificant. 

An  analogous  system  is  to  be  found  in  France, 
especially  in  the  mountainous  district  which  lies  between 
Aveyron  and  Herault. 

The  general  application  of  this  system  of  collective 
property  would  present  many  difficulties,  especially  of 
administration.  De  Laveleye  describes  the  regulations 
adopted  in  Switzerland  with  this  object,  and  gives  an 
account  of  the  constitution  of  the  commune  of  Gross,  in 
the  canton  of  Schwytz.  All  members  over  the  age  of 
eighteen  are  entitled  to  take  part  in  a  session  held  annually 
in  the  month  of  April,  at  which  accounts  are  presented  and 
ordinary  business  is  transacted;  special  sessions  may  be 
'  De  Laveleye,  op.  cit,  p.  293. 


ADMINISTRATION  61 

summoned  by  the  president ;  all  officials  are  elected  and 
acceptance  of  office  is  obligatory.  Executive  functions  are 
vested  in  an  elected  council  of  seven  members,  which 
regulates  the  management  of  the  forests,  allots  the 
produce  of  the  annual  felling  of  trees,  prepares  the  allot- 
ment of  land,  is  the  legal  representative  of  the  corporation, 
and  may  order  the  execution  of  public  works  up  to  a  limit 
of  60  fr. ;  it  is  also  entrusted  with  the  duty  of  seeing 
that  regulations  are  duly  observed,  and  fixes  the  amount 
of  the  fines  and  penalties  in  case  of  their  infraction.  The 
president  convokes  the  council,  and  members  absent 
without  leave  or  sufficient  excuse  are  fined.  The  officials 
are  remunerated  by  the  remission  of  some  of  their  "  days 
of  work,"  which  in  common  with  other  members  of  the 
commune,  they  are  bound  to  give  to  the  public  service. 
The  president  is  elected  by  the  general  assembly,  which 
must  be  summoned  if  a  hundred  members  demand  it. 
The  president  receives  a  salary  as  an  allowance  for  special 
service.  Five  other  officials  are  enumerated :  treasurer, 
secretary,  clerk  of  the  works,  forester,  and  accountant,  all 
of  whom  receive  salaries.  "  The  system  of  administration 
of  these  land-holding  communes  is,  it  will  be  seen,  very 
complete ;  they  hold  a  middle  place  between  the  position 
of  a  political  body  and  that  of  a  joint  stock  company." 
Such  a  position,  however,  would  be  a  disadvantageous  one, 
since  political  bodies  of  all  kinds  allow  of  friction,  intrigue, 
loss  of  time,  and  enmity,  and  are  generally  arbitrary  in 
character,  whilst  companies,  although  indispensable  for 
great  enterprises,  are  also  open  to  objection  on  the  ground 
of  extravagance,  negligence,  and  absence  of  responsibility. 
It  may  be  admitted  that  the  small  administrative  bodies 
which  direct  the  Allmenden  might  partly  escape  these 
evils ;  but  enlargement  of  their  field  of  action  would 
inevitably  produce  them  in  full  force,  and  in  any  case  they 
could  not  altogether  free  themselves  from  the  trammels  of 
routine.  The  Allmenden  are  interesting  relics  of  an 
ancient  organisation,  but  there  is  nothing  to  indicate  that 
the  germ  of  social  renovation  lies  in  this  system. 

The  German  "  Marke  "  was  an  institution  analogous  to 


62  THE  GERMAN  "MARKE^* 

the  "Dessa"  of  Java,^  or  the  Mir  of  Russia.  The 
village  dwellings  were  grouped  together,  the  houses  and 
orchards  were  private,  all  else  was  common  property ;  the 
land  immediately  around  the  village  was  divided  into 
plots;  the  system  of  culture  was  alternating,  a  piece  of 
land  after  cultivation  for  one  year,  was  allowed  to  lie 
dormant  (sometimes  for  eighteen  or  twenty  years) :  in 
this  way  the  expenditure  of  capital  on  the  soil  was  evaded. 
The  population  was  sparse.  According  to  de  Laveleye 
there  were  then  about  three  or  four  people  to  the  square 
kilometre — that  is,  a  population  from  twenty-five  to  thirty 
times  less  dense  than  at  the  present  time  in  Germany,  and 
the  uncultivated  land  was  from  eighteen  to  twenty  times 
as  extensive  as  the  cultivated.  These  ancient  Germans 
consumed  but  little  grain,  and  subsisted  principally  upon 
milk  and  the  flesh  of  their  cattle  and  upon  game.  At 
the  periodical  division  of  land,  the  chiefs  obtained 
a  larger  portion  than  the  others ;  cultivation  was  uniform, 
under  the  system  known  as  "  Flurzwang."  The  rotation 
of  crops  and  the  regulations  for  work  was  decided  by  the 
inhabitants  of  a  village  in  general  assembly. 

At  this  time  the  word  "  eigenthum  "  (personal  property) 
was  unknown.  How,  then,  in  such  a  community  did 
individual  property  arise  ?  It  originated  in  the  reclama- 
tion of  land  by  individuals,  and  the  evolution  of  private 
ownership,  which  took  place  amongst  the  ancient 
Germans,  was  precisely  analogous  to  that  which,  2000 
years  later  and  at  3000  leagues  of  distance,  occurred  in  the 
island  of  Java. 

De  Laveleye  says :  "  The  man  who  enclosed  a  part  of 
the  vacant  communal  land  or  forest  for  the  purpose  of 
cultivation  became  the  hereditary  proprietor  of  it.  The 
lands  thus  reclaimed,  were  not  subject  to  division,  for 
which  reason  they  were  termed  *  exsortes '  in  Latin,  and  in 
the  Teutonic  tongue  '  bifang,'  from  the  verb  '  bifahan,' 
signifying  to  seize,  to  surround,  or  to  enclose.  The  word 
'  perprisa,'  in  French  '  pourpris,  pourprinse,'  has  precisely 
the  same  meaning.     Many  of  the  title-deeds  of  the  early 

^  See  p.  55. 


ORIGIN  OF  PRIVATE  OWNERSHIP  53 

middle  ages  give  occupation  of  the  desert  or  waste  land 
as  the  origin  of  the  properties  to  which  they  relate.  In 
France  the  charters  of  the  first  two  dynasties  frequently 
refer  to  it.  Ancient  records  speak  of  it  as  being  an 
ordinary  method  of  acquiring  property.  Dareste  de  la 
Chavanne  cites  the  '  custom  of  Mont  Jura,'  which  confers 
upon  the  first  occupier  free  and  unfettered  possession  of 
all  reclaimed  land  ;  but  it  was  forbidden,  under  severe 
penalties,  to  enclose  or  circumscribe  the  common  lands, 
unless  this  was  done  in  the  presence  and  with  the  consent 
of  the  other  members  entitled  to  a  share  of  the  communal 
property."  ^ 

This  explanation  is  important,  and  shows  that  when 
land  was  reclaimed  by  an  individual,  it  became  his  private 
property,  with  the  tacit  or  expressly  given  consent  of  the 
community.  Lands  thus  reclaimed  were  not  included  in 
the  periodic  division,  and  justly,  since  the  community 
suffered  no  appreciable  loss  by  these  enclosures,  or  if  it 
did,  a  formal  contract  was  made  between  the  community 
and  the  new  proprietor,  who  undertook  to  pay  compensa- 
tion either  by  service  or  by  rent.^  The  enclosure  and 
cultivation  of  waste  land  was  necessarily  undertaken  by 
families  who  possessed  some  capital,  and  were  able  to 
hire  and  pay  for  labour.  When  once  enclosed,  relatively 
intensive  cultivation  of  these  lands  became  practicable, 
and  historians  consider  that  the  first  great  agricultural 
improvement,  the  rotatiop  of  crops,  which  tripled  or  quad- 
rupled the  production  of  the  soil,  was  thus  made  possible. 
The  benefit  which  arose  from  these  enclosures,  therefore, 

*  De  Laveleye,  op.  cit,  p.  i  lo. 

^  De  Laveleye  expresses  himself  thus  :  "All  demands  imposed 
upon  the  community  were  borne  by  the  common  lands.  The 
proprietor  of  independent  and  enclosed  property,  having  no  right  to 
share  in  the  common  pasturage  and  forests,  was  naturally  relieved 
from  the  contributions  in  labour  or  in  kind  to  which  the  members  of 
the  commune  were  liable."  It  might  be  inferred  from  this  passage, 
that  in  some  cases  the  owners  of  independent  property,  when  they 
obtained  it,  renounced  their  claim  to  a  share  of  the  common  property 
remaining.  If  so,  the  title  to  private  property  would  be  strengthened, 
since  the  arrangement  would  be  in  the  nature  of  an  exchange. 


54  COLLECTIVISM  IN  MOHAMMEDAN  COUNTRIES 

afforded  a  justification  for  private  ownership  of  land.  De 
Laveleye  draws  an  attractive  picture  of  the  lot  of  the 
ancient  German,  and  contrasts  it  with  that  of  the  peasant 
who  to-day  occupies  his  place ;  ^  but  if  the  members  of  the 
Marke  were  so  fortunately  situated,  how  was  it  that 
they  so  readily  abandoned  their  native  soil  and  the 
benefits  of  this  system?  What  was  the  cause  of  the 
migrations  of  barbarians,  especially  of  the  Germans,  if  not 
privation  and  famine,  against  which  the  collective  system 
was  unable  to  protect  even  so  small  a  population  scattered 
over  so  vast  an  extent  of  territory.  To  eulogise  the 
happy  condition  of  these  barbarians,  who  poured  their 
famished  hordes  out  from  their  vast  uncultivated  lands 
upon  their  gentler  and  more  civilised  neighbours,  is  to 
make  an  undue  use  of  poetical  license. 

Some  account  of  systems  of  collective  ownership 
amongst  peoples  whose  climate  and  whose  civilisation 
differ  widely  from  ours  may  be  useful.  The  village 
communities  of  Java  and  of  India  are  types  of  this  kind 
of  organisation,  which  have  attracted  the  approving 
notice  of  de  Laveleye. 

In  all  Mohammedan  countries  the  sovereign  is,  by  the 
authority  of  the  Koran,  the  supreme  owner  of  the  land  ; 
the  men  who  occupy  and  cultivate  it,  are,  in  the  eye  of 
the  law,  civil  as  well  as  religious,  merely  tenants  ;  and  it  is 
as  owner,  and  not  as  a  taxing  authority,  that  he  levies  an 
impost,  which  is,  in  fact,  rent.  It  is  also  as  owner  of  the 
soil  that  the  sovereign  exacts  forced  labour  from  his 
people.  This  regime  is  responsible  for  the  almost 
complete  absence  of  personal  initiative  which  characterises 
Mohammedan  countries.  The  manifestation  of  individual 
energy  is,  in  truth,  in  inverse  proportion  to  the  extent  to 
which  a  community  is  under  the  influence  of  collectivism, 
a  term  which  may  be  said  to  be  almost  synonymous  with 
fatalism  ;  and  where,  as  in  a  Mohammedan  country,  the 
individual  is  crushed  under  the  weight  of  traditional 
habit,  and  where  even  his  actions  and  his  thoughts  are 
guided  by  immutable  usage,  collectivism,  to  which  such  a 
*  De  Laveleye,  op.  cit,  pp.  91-92. 


THE  «DESSA''  OF  JAVA  56 

condition  of  mind  and  soul  is  indispensable,  is  certain  to 
find  adherents.  Although  similar  in  principle,  the 
methods  of  tenure  vary  in  detail  in  these  countries. 
In  Java  the  cultivator  yielded  to  his  lord  one-fifth  part  of 
the  produce  of  his  land,  and  one  day's  labour  out  of  five  ; 
but  by  gradual  encroachments,  the  native  princes  came 
to  exact  one-half  the  produce  of  irrigated,  and  one-third 
of  that  of  dry,  rice  fields.  The  Dutch,  desiring  to  gain 
popularity,  re-established  the  old  custom,  and  even 
modified  it,  demanding  only  one  day's  work  in  seven. 
As  in  the  case  of  the  Russian  Mir,  the  village 
community  in  Java,  called  the  "  Dessa,"  is  collectively 
responsible,  both  for  taxes  and  for  labour.  In  details 
the  system  of  land  tenure  varies  somewhat,  but  communal 
possession  by  the  village  prevails  throughout  the  country. 
The  principal  product  is  rice,  which  is  well  adapted  for 
collective  cultivation  ;  it  depends  chiefly  upon  a  good 
system  of  irrigation,  and  it  requires  but  little  individual 
ability  or  effort.  The  method  of  partition  of  the  "  sawahs  " 
or  rice  lands,  although  not  precisely  the  same  everywhere, 
always  conforms  to  a  certain  type  ;  it  does  not,  however, 
secure  equality  amongst  all  members  of  the  Dessa, 
even  amongst  the  heads  of  families.  In  some  places 
labourers  who  do  not  possess  draft  animals,  are  excluded 
from  the  ballot.  The  Dutch  Government  sought  to 
correct  this  abuse,  and  to  secure  that  each  head  of  a 
family  should  have  a  share  in  the  land,  but  the  attempt 
was  unsuccessful.  The  general  custom,  according  to 
de  Laveleye,  is,  that  in  order  to  obtain  a  "  lot,"  a  peasant 
must  possess  a  yoke — that  is,  two  buffaloes  or  oxen — and 
he  says  that  the  labourers  thus  excluded  from  allotments 
are  very  numerous.  The  allotments  are  settled  by  the 
chief  of  the  Dessa,  under  the  supervision  of  the  district 
commissioners  and  the  European  "  residents,"  who  dis- 
charge functions  analogous  to  those  of  "prefects"  in 
France.  A  rotation  is  arranged,  so  that  each  family 
should  occupy  all  the  available  lots  in  succession.  The 
chiefs,  who  remain  in  office  for  a  year,  are  chosen  from 
amongst  the   most  prominent,  the  wealthiest,  or,  since 


56  PRIVATE  OWNERSHIP  IN  JAVA 

custom  is  hostile  to  youth,  the  oldest,  inhabitants ; 
and  in  almost  all  places  they,  as  well  as  the  principal 
village  officials,  obtain  larger  or  better  allotments  than 
the  rest. 

Side  by  side  with  the  collectivist  system  of  land  tenure 
in  Java,  a  system  of  private  ownership  has  grown  up. 
The  cause  of  this  phenomenon  is  of  interest,  since  it  throws 
considerable  light  on  the  system  of  freehold  personal 
property  in  land  which  is  now  so  severely  criticised.  In 
the  majority  of  provinces  any  one  who  reclaims  land 
belonging  to  the  community  becomes  the  owner  of  it, 
with  hereditary  succession,  so  long  as  it  continues  to  be 
cultivated  ;  since,  however,  it  is  the  object  of  the  local 
authority  to  secure  the  greatest  extent  possible  of  land 
for  partition,  it  frequently  happens  that  private  property 
thus  created  is  in  some  way  reabsorbed  by  the  Dessa. 
In  other  provinces  reclamation  only  confers  possession 
for  three  or  four  years,  after  which  it  becomes  communal 
property.  This  work,  says  de  Laveleye,  is  performed 
by  the  richer  inhabitants,  who  alone  have  the  means 
required  for  constructing  the  irrigation  works,  which  are 
indispensable  for  the  culture  of  rice.  The  extent  of  land 
held  by  private  owners  in  Java  varies  greatly  in  the 
different  provinces :  thus,  according  to  de  Laveleye,  in 
the  district  of  Talaga,  out  of  8884  "bouws,"^  only  43 
are  recognised  as  being  private  hereditary  property ; 
but  in  Yapara,  7454  proprietors  hold  8701  *'bouws,"and 
in  Rembang,  out  of  158,425  bouws,  48,185,  or  nearly  one- 
third,  are  private  property,  one-half  having  been  acquired 
by  reclamation  carried  out  by  the  present  possessors,  and 
the  other  half  obtained  by  inheritance  or  by  purchase.^ 
But  although  the  principle  of  private  ownership  has 
obtained  a  footing  in  Java,  its  position  is  a  precarious  one. 
If  a  proprietor  leaves  his  Dessa,  his  property  reverts  to 
the  community. 

According  to  Sir  Stamford  Raffles,  whose  knowledge 
of  Java  was  intimate,  hardly  one-eighth  of  the  land  was 
reclaimed   and    occupied    at  the  commencement  of  the 
'  A  "bouw"  =  7i  ares.  ^  Qp  ^//^  pp  53.54. 


DISCOURAGEMENT  OF  PRIVATE  ENTERPRISE  57 

nineteenth  century,  and  it  is  estimated  that  at  the  present 
time  four-fifths  of  the  country  is  still  uncultivated. 

Since  the  population  increases  at  the  rate  of  from 
300,000  to  400,000  yearly,  there  is  always  a  large  number  of 
adults  who  are  unprovided  with  lots ;  in  the  majority  of 
Dessas  the  lot  is  continually  decreasing  in  size,  and  in 
some  districts  the  peasants  consider  that  at  the  present  time, 
they  have  less  than  a  third  of  the  extent  allotted  to  their 
fathers,  the  area  having  fallen  to  a  third  or  a  quarter  of 
a  "  bouw."  It  has  been  proposed  to  forbid  division  into 
lots  of  less  than  one-half  of  a  bouw,  but  in  that  case  a 
large  number  of  adults  would  have  no  portions.  Not- 
withstanding the  insufficient  size  of  their  lots,  the 
peasants  do  not  dare  to  emigrate,  since  they  would  lose 
their  rights  in  the  Dessa  they  quit,  without  acquiring 
any  rights  in  that  to  which  they  desired  to  go. 

The  remedy  for  this  evil  is  reclamation  of  land,  either 
by  individual  or  collective  effort.  The  obstacle  to  the 
first  of  these  methods,  is  the  precarious  nature  of  private 
property,  and  the  paralysis  of  energy,  produced  by  the 
reign  of  collectivism ;  the  objection  to  the  second,  is  the 
difficulty  of  finding  the  capital  required.  De  Laveleye 
proposes  that  a  guarantee  of  undisturbed  possession  of 
their  land  for  thirty  or  forty  years,  should  be  given  to  those 
who  would  carry  out  the  work  of  reclamation.  The 
suggestion  is  excellent,  but  it  would  involve  a  serious 
violation  of  the  principle  of  collective  ownership,  and  the 
proposal  shows  that  when  the  question  is  one  of  extension 
of  cultivation,  even  those  who  are  strongly  predisposed  in 
favour  of  the  system  of  collective  property  in  land,  are 
compelled  to  suggest  recourse,  either  to  private  ownership, 
or  to  some  substitute  for  or  approximation  to  it. 

Collectivism,  by  diminishing  personal  responsibility, 
and  by  weakening  moral  restraint,  encourages  a  rapid 
increase  of  population,  which  in  Java  always  presses 
closely  upon  the  means  of  subsistence:  in  1808  it  was 
reckoned  at  3,700,000  ;  in  1863  at  13,500,000;  in  1872  at 
17)300.000)  and  in  1897  at  26,335,000.  An  excessive 
increase  of  population,  combined  with  a  general  want  of 


58    SUITABLE  ONLY  TO  A  PASTORAL  PEOPLE 

foresight  and  a  lack  of  individual  enterprise,  are  the  worst 
social  conditions  conceivable,  and  the  effect  of  the 
collectivist  system  of  land  tenure  in  Java,  so  far  from 
improving  the  condition  of  the  rural  "proletariat," 
appears  to  be  more  likely  to  transform  the  Javanese  into 
a  nation  of  paupers.  It  is  conjectured  that  collectivist 
agrarianism  was  imported  into  Java  from  India :  in  that 
country,  however,  the  substitution  of  an  agricultural  for  a 
pastoral  system  was  unfavourable  to  the  survival  of  the 
collectivist  tenure  of  land,  and  it  is  now  only  to  be 
found  in  some  remote  districts.  Agrarian  collectivism 
is,  indeed,  only  suitable  to  a  pastoral  people,  or  to  people 
still  in  the  preliminary  stage  of  transformation  from  a 
pastoral  to  an  agricultural  regime,  and  the  collectivist  tenure 
of  land  was,  in  fact,  on  the  point  of  disappearing  from 
Hindoostan  when  the  English  took  possession  of  the 
country. 


CHAPTER  VI 


Land  can  never  have  been,  strictly  speaking,  common  property. 
First  appearance  of  social  inequality.  Features  common  to  all 
collective  systems  of  land  tenure.  Causes  of  the  general  dis- 
appearance of  these  systems.  Claim  of  nations  to  their  land  the 
same  as  that  of  individuals.  Modern  attempts  to  re-establish 
collectivist  ownership  of  land.  Effect  of  proposed  nationalisation 
of  land  in  France.  Indemnity  or  confiscation.  Various  methods 
proposed  for  indemnifying  owners.  Hypothetical  purchase  of 
the  land  by  the  English  Government.  Unearned  Increment. 
Functions  of  a  landowner. 

The  preceding  description  of  various  collectivist  systems 
of  land  tenure,  shows  that  in  all  places  they  tend  to  develop 
into  a  system  of  private  ownership.  If  this  world  is  not 
the  result  of  mere  accident,  social  facts,  when  found  to  be 
universal,  must  be  deemed  to  be  in  conformity  with  natural 
laws ;  the  presumption,  therefore,  must  be,  that  this  evolution 
is  in  accordance  with  those  laws ;  it  is  also  in  harmony 
with  modern  civilisation,  with  the  free  development  of 
the  individual,  and  with  the  improvement  of  agriculture. 

When  humanity  first  appeared,  no  doubt  the  earth 
would  appear  to  be  common  property ;  but  even  in  the 
most  primitive  society,  a  family,  or  group  of  families, 
would  soon  regard  the  portion  of  land  on  which  they 
lived  as  belonging  especially  to  them,  and  would  consider 
an  attempt  on  the  part  of  others  to  establish  themselves 
upon  it  as  being  contrary  to  natural  law;  the  mere 
occupation  of  land  would  naturally  appear  to  confer  a 
title  to  its  continued  possession,  and  the  family,  the  clan  or 
the  tribe,  would  soon  assert  an  exclusive  right  to  the  area 

59 


60     FIRST  APPEARANCE  OF  INDIVIDUALISM 

occupied  by  them.  Land,  therefore,  can  never,  even  in  the 
earliest  times,  have  been  common  property,  except  in  a 
relative  sense :  it  might  be  so  in  respect  of  the  individuals 
of  a  tribe  or  clan,  but  not  in  relation  to  humanity 
generally. 

In  this  restricted  sense,  land  occupied  by  people  who 
lived  by  the  chase  may  be  regarded  as  their  common 
property,  and  with  some  exceptions  the  same  conditions 
would  continue  with  pastoral  peoples ;  but  when  an 
agricultural  rigime  supervened,  and  a  community,  relin- 
quishing a  nomad  life,  became  settled,  then  the  germs  of 
individual,  or  at  any  rate  of  family,  property  at  once 
appeared,  and  amongst  all  peoples,  in  all  climates  and  in  all 
times,  the  house  and  its  surroundings  were  claimed  as  the 
exclusive  and  hereditary  property  of  the  family  which 
occupied  them.  There  are  two  reasons  for  this.  From  the 
dawn  of  civilisation,  promiscuity  of  habitation  has  always 
been  repugnant  to  men  who  naturally  desire  to  live  with 
those  nearest  to  and  dependent  upon  them  ;  and  in  all 
countries,  in  the  East  as  well  as  in  the  West,  we  find  a 
strong  spontaneous  desire  for  a  separate  house  and  for  the 
liberty  and  privacy  of  independent  family  life.  This  is  the 
first  manifestation  of  individualism,  and  the  origin  of 
private  property  in  early  times.  So  far  the  claim  is  the 
outcome  of  natural  and  universal  instinct ;  but  there  is 
another  and  an  equitable  reason  for  it :  a  house  is 
peculiarly  the  work  of  an  individual  man,  and  he  has 
therefore  a  just  claim  to  its  exclusive  possession,  as  also 
to  the  ground  immediately  adjoining,  which  he  cultivates, 
and  which  his  labour  has  reclaimed  from  the  surrounding 
waste.  Private  property  in  house  and  garden  was  thus 
evolved  in  Asia  as  well  as  in  Europe  contemporaneously 
with  the  establishment  of  an  agricultural  regime. 

Private  possession  of  house  and  garden  or  "real" 
property  involved  the  private  ownership  of  "  personal " 
property,  which  in  pre-industrial  times  consisted  merely  of 
the  instruments  of  labour  and  the  products  of  the  soil. 
The  more  laborious,  more  able,  or  more  thrifty  members 
of  the  community  would  secure  a  larger  share  of  this  wealth. 


AND  OF  SOCIAL  INEQUALITY  61 

and  thus  inequality  of  social  condition  and  the  consequential 
differentiation  of  classes  into  rich  and  poor,  would  soon 
appear  even  in  those  cases  where  the  land,  with  the 
exception  of  houses  and  gardens,  was  common  property. 
The  poorer  people  would  be  compelled  to  sell  their  labour 
to  the  more  wealthy,  in  return  for  wages.  The  hire  of 
labour  for  wages  was  no  doubt  a  means  by  which  personal 
wealth  was  created,  and  Lassalle's  ingenious  theory  that  it 
was  attributable  to  slavery  is  unnecessary ;  no  doubt  slavery 
played  a  part  in  the  early  history  of  most  peoples,  and 
was  often  merely  a  form  of  the  hire  of  labour,  but  the  hire 
of  free  and  independent  labour  is  amply  sufficient  to 
explain  the  growth  of  private  wealth.  The  inequality  of 
personal  property  brought  about  a  like  inequality  in  the 
distribution  of  land  or  real  property,  since  it  was  natural, 
and  even  necessary,  in  the  interest  of  the  community,  that, 
in  the  allotment  of  communal  land,  regard  should  be  paid 
to  the  means  of  cultivation — that  is,  to  the  personal  property 
possessed  by  those  amongst  whom  it  was  to  be  divided. 

Another  cause  of  social  inequality  in  these  distant  ages, 
was  the  remuneration  of  intellectual  and  moral  services, 
with  which  no  society,  however  rude,  could  altogether 
dispense ;  and  thus,  the  director  of  the  partition  of  the 
land,  the  village  administrators  and  surveyors,  and  others, 
having  special  claims,  apart  from  merely  manual  labour, 
would  receive  larger  allotments  of  land. 

It  is  in  this  way  that,  in  the  nature  of  things,  and 
owing  to  the  necessities  of  social  progress,  inequality  of 
social  condition  appeared  and  gradually  increased  in 
communities  where  the  system  was  originally  one  of 
complete  equality. 

The  features  common  to  all  systems  of  collective 
property  in  land,  are  these :  in  the  first  place,  the  territory 
must  be  very  large  relatively  to  the  number  of  the  inhabi- 
tants, in  consequence  of  the  unavoidable  imperfection  of 
culture  under  this  regime;  secondly,  the  system  entails 
restriction  of  the  liberty  of  domicile  and  a  kind  of  adscrip- 
tion  to  the  soil,  since  those  who  once  leave  the  community 
lose   their   rights ;    and  thirdly,  it  involves   the   rigorous 


62  PROGRESS  DUE  TO  INDIVIDUALS 

exclusion  of  strangers.  Another  characteristic  is  the 
slowness  and  difficulty  with  which  a  community  can 
reclaim  their  waste  land  when  compared  with  the  rapidity 
with  which  similar  work  is  carried  out  by  private  enter- 
prise. These  four  points  show  the  restricted  and  anti- 
progressive  character  of  this  kind  of  land  tenure. 

To  what  cause  is  the  general  disappearance  of  these 
systems,  and  the  gradual  but  unlimited  extension  of  the 
principle  of  private  property,  to  be  attributed,  and  what  is 
the  explanation  of  the  fact  that  primitive  societies  have 
found  it  impossible  to  maintain  equality  of  condition 
amongst  their  members?  It  is  no  doubt  true  that  in 
certain  countries  the  issue  has  been  precipitated  by  the 
action  of  the  feudal  system,  or  by  conquest  or  usurpation — 
but  wherever  man  exists  these  conditions  are  found,  and 
for  so  universal  an  effect  there  must  be  a  universal  cause. 

The  answer  is  that  all  social  improvement,  inventions, 
the  progress  of  agriculture,  and  of  the  arts  and  sciences, 
are  due  to  individuals,  and  not  to  communities,  who  can 
assist  but  cannot  initiate  improvements :  it  is  the  indi- 
vidual, therefore,  who  ought  to  reap  the  reward.^  This, 
then,  is  the  cause  to  which  the  creation  and  extension  of 
private  property,  the  consequent  inequality  of  social  con- 
ditions, and  the  decay  of  collective  systems  is  owing. 

If  the  system  of  collective  ownership  of  land  had  never 
had  a  trial,  it  might  be  maintained  that  either  by  ratiocina- 
tion or  by  experiment  its  advantages  would  have  become 
evident,  and  that  in  order  to  secure  this  superior  regime 
the  human  race  would  have  gradually  relinquished  the 
system  of  private  ownership.  But  it  was  the  collective, 
and  not  the  private  ownership  of  land,  that  was  the  first 

*  Proudhon  has  admirably  described  this  phenomenon:  "  I  observe," 
he  says,  "  that  social  life  manifests  itself  in  a  double  way — by  conserva- 
tion and  by  development.  The  development  is  effected  through  the 
agency  of  individual  energy  ;  the  mass  is  by  nature  unfruitful,  passive, 
and  refractory  to  innovation.  It  is,  if  I  may  venture  upon  the  com- 
parison, the  matrix,  sterile  in  itself,  wherein  are  deposited  the  germs  (of 
improvement)  springing  from  the  individual  initiative  which  represents 
the  male  element  of  a  hermaphrodite  society." — Contradictions 
iconomiquesy  4th  ed.,  vol.  i.,  p.  223. 


AN  EXPERIMENT  THAT  FAILED  63 

system  tried,  and  it  was  only  by  slow  degrees,  in  spite  of 
many  obstacles,  and  under  the  pressure  of  necessity,  of 
social  advantages,  of  instinct,  and  of  reflection,  that  the 
system  of  collective  property  was  abandoned  and  that  of 
private  property  established.  Can  it  be  wise  to  repeat  an 
experiment  which  has  been  tried  for  long  ages  throughout 
the  world  and  has  everywhere  failed?  Yet  writers  in 
increasing  numbers  urge  that  this  attempt  should  be 
made,  and  extol  what  they  term  the  nationalisation  of  the 
soil ;  but  the  word  nationalisation  itself  shows  that  what  is 
proposed  would  be  but  a  half-measure.  On  what  ground 
has  a  nation,  any  more  than  a  family  or  an  individual,  a 
claim  to  exclusive  possession  of  the  land  on  which  accident 
has  placed  it  ?  When  the  Americans  interdict  their  country 
to  the  Chinese,  the  only  ground  on  which  they  can  claim 
a  right  to  do  so,  is  that  of  occupation  and  hereditary 
possession  ;  but  this  is  the  basis  of  the  claim  of  the 
individual  to  his  land,  and  if  the  claim  is  bad  in  the  one 
case  it  is  equally  untenable  in  the  other,  and  "  nationalisa- 
tion of  the  soil "  would  therefore  be  unjust,  since  it  would 
involve  the  possession  of  land  by  one  nation  to  the 
exclusion  of  others.  There  can  be  no  middle  course ; 
either  the  claim  of  the  individual  to  his  land  must  be 
accepted  as  just,  or  land  must  be  held  to  be  the  common 
property  of  the  whole  human  race  ;  and  in  this  case,  if  the 
Americans  deny  their  land  to  the  Chinese,  they  are  de- 
priving the  latter  of  their  natural  rights  as  human  beings. 
Advocates  of  the  collective  ownership  of  land  belong 
to  different  categories.  There  are  avowed  and  logical 
collectivists,  such  as  those  of  the  Franco-Belgian  school  of 
Colins,  and  there  are  publicists  with  collectivist  tendencies, 
such  as  de  Laveleye,  Stuart  Mill,  and,  more  especially, 
Henry  George.  Leaving  on  one  side  the  philosophers 
such  as  Herbert  Spencer^  and  Francois  Huet,  who,  ignorant 
of  facts  and  lacking  experience,  were  guided  solely  by 
speculative  reasoning,  and  showed  more  or  less  hostility 

^  [Spencer's  opinion  upon  land  tenure  was  greatly  modified  in 
later  years.  Vide  Life  and  Letters  of  Herbert  Spencer^  by  D.  Duncan, 
1908,  p.  338.] 


64  INADEQUACY  OF  COLLECTIVIST  PROPOSALS 

to  the  principle  of  private  ownership  of  the  soil,  passing 
over  also  for  the  present  the  more  thorough-going 
collectivists  such  as  Marx  and  his  followers,  it  will  be 
useful  to  restate  the  assertions  from  which  these  col- 
lectivist  theories  are  derived.  The  following  arguments 
are  common  to  all  these  theorists — namely,  that  every  man 
has  a  primordial  and  indefeasible  right  to  the  enjoyment 
of  the  soil,  which,  they  say,  is  an  indispensable  instrument 
of  labour,  without  which  a  man  cannot  support  himself,  and 
is  merely  a  slave  who  exists  only  by  the  sufferance  of 
others ;  again,  they  assert  that  the  value  of  land  and  the 
return  from  it  increase  continually  without  any  exertion 
on  the  part  of  its  owner,  that  this  increase  is  a  gratuitous 
benefaction  of  nature,  and  that  it  is  therefore  unjust  that 
the  possessor  should  retain  the  perpetual  property  in  this, 
which  they  call  an  "  unearned  increment."  Another  state- 
ment urged  in  support  of  the  doctrine  of  the  nationalisa- 
tion of  land  is,  that  since  private  property  has  lost  its 
social  character,  it  has  become  a  privilege  without  any 
corresponding  obligation,  and  now  fulfils  no  purpose 
except  the  personal  advantage  of  its  possessor.  These, 
besides  the  arguments  derived  from  history,  constitute  the 
premises  of  collectivists,  and  of  writers  with  collectivist 
proclivities.  It  follows,  therefore,  that  any  system  which 
it  is  proposed  to  substitute  for  the  present  regime  ought 
to  guarantee  to  each  individual  direct  possession  and  use 
of  the  land,  and  at  the  same  time  ought  to  secure  greater 
advantages  for  the  community  generally  —  that  is, 
increased  production  and  greater  moral  satisfaction. 
These  are  the  objects  which,  on  their  own  showing,  the 
system  advocated  by  collectivists  must  realise  to  redeem 
their  promises  and  justify  their  criticism  of  the  existing 
riginie ;  but  when  their  proposals  are  examined,  their 
inadequacy  to  secure  these  ends  becomes  obvious. 

No  serious  writer  would  propose  to  reinstate  in  its 
entirety  the  primitive  system  of  village  communal  property, 
with  its  exclusiveness  and  its  allotment  of  land  by  lottery. 
De  Laveleye  himself  recognises  that  the  early  forms  of 
rural  collectivism  have  been  destroyed,  not  by  accident  or 


A  BASIS  OF  HOPES  AND  ASPIRATIONS       65 

by  extraneous  events,  but  by  the  inherent  force  of  circum- 
stances and  the  tendencies  of  human  nature.  He  says : 
•'  It  must  be  admitted  that  agricultural  co-operation  will 
be  difficult  to  generalise.  The  success  of  the  experiments 
made  at  Assington,  in  England,  and  on  the  estate  of 
Tellow,  in  Germany,  was  largely  due  to  the  influence  of 
J.  Gurdon  and  von  Thunen,  The  ancient  agrarian  com- 
munities were,  in  fact,  agricultural  co-operative  societies. 
For  basis  they  had  the  ties  of  relationship,  family  affection, 
and  immemorial  tradition  ;  and  yet  they  have  disappeared, 
not  destroyed  by  the  hostility  of  public  authorities,  but 
slowly  undermined  by  the  sentiment  of  individualism  or 
egotism,  which  is  characteristic  of  modern  times.  Can  it 
be  hoped  that  a  sentiment  of  collective  fraternity  will 
develop  itself  with  sufficient  force  to  take  the  place  of 
family  affection  and  serve  as  cement  for  the  association  of 
the  future?  One  may  hope  this  will  be  so,  and  the 
difficulties  of  the  present  position  make  it  eminently 
desirable."  ^ 

To  rely  solely  on  hopes  and  aspirations,  and  upon  so 
fragile  a  basis  to  attempt  to  reconstruct  society,  beginning 
by  destroying  the  system  under  which  civilised  humanity 
has  enjoyed  so  large  a  measure  of  material  comfort  and 
leisure,  and  so  much  intellectual  and  moral  happiness, 
shows  the  reckless  spirit  of  a  gambler.  Neither  old  tradi- 
tions, nor  family  ties,  nor  religious  sentiments  have  sufficed 
to  maintain  intact  the  collectivist  systems  of  early  times ; 
and  now,  when  family  ties  are  less  binding  and  religious 
feeling  is  enfeebled,  is  the  permanent  reconstitution  of 
these  vanished  institutions  conceivable  ?  These  reformers 
contradict  themselves :  on  the  one  hand  they  censure  the 
individualism  and  egotism  of  modern  times ;  on  the  other 
they  can  hardly  find  words  forcible  enough  to  condemn, 
or  penalties  severe  enough  to  punish  associations,  such  as 
religious  bodies,  in  which  the  individual  is  subordinated  to 
the  community,  of  which  he  is  a  member. 

Since  the  ancient  systems  of  communal  village  property 
are  thus  inapplicable  to  modern  life,  what  is  the  alternative 

'  De  Laveleye,  op.  cit.^  p.  249. 

E 


66  THE  STATE  AS  OWNER 

proposed?  The  "nationalisation  of  the  soil"  would 
merely  substitute  inequality  between  nations  for  that 
between  individuals  or  between  communes :  a  kind  of 
inequality  which  would  be  not  more,  but  less 
justifiable,  since  the  difference  between  individuals,  in 
respect  of  merit,  is  far  greater  than  that  between  two 
civilised   countries. 

If  the  state  proposes  to  possess  itself  of  the  land,  it 
must  proceed  either  by  negotiation  with  the  present 
owners,  or  by  their  compulsory  expropriation.  It  is 
admitted  that  the  present  proprietors  have  a  just  claim  to 
an  indemnity,  which  would  be  paid ;  but,  neglecting  for 
the  moment  the  proposed  method  of  payment,  how  would 
the  state  deal  with  the  land  when  purchased  ?  Two  plans 
are  proposed  :  one  is  to  grant  leases  to  co-operative  associa- 
tions, the  other  to  let  to  ordinary  farmers  by  auction.  No 
doubt  there  are  other  possible  systems,  such  as  cultivation 
under  the  direct  administration  of  the  state,  or  by  the 
grant  of  concessions  to  communes,  but  the  first  of  these 
methods  is  obviously  impracticable.  The  enormous  area 
of  France,  with  its  528,000  square  kilometres  of  land,  could 
not  be  successfully  cultivated  by  a  central  ofiRcial  admini- 
stration. The  concession  of  land  to  communes  appears  at 
first  sight  to  be  more  practicable,  but  there  are  serious 
objections  to  this  method  also.  In  the  first  place,  there  is 
the  natural  inequality  of  productiveness  between  different 
communes  which  could  not  be  satisfactorily  met  by  any 
adjustment  of  the  rents  payable  to  the  state ;  then  there 
is  the  ignorance  and  the  subservience  to  routine  so 
frequently  to  be  found  amongst  communal  authorities ; 
and  lastly,  there  is  the  danger  of  the  yoke  which  the 
mayor  or  the  municipal  councillors,  if  they  were  sole 
directors  of  cultivation  or  of  the  division  of  land  and 
employers  of  labour,  would  be  able,  by  the  arbitrary  use 
of  their  authority,  to  impose  upon  the  citizens,  and  no  one 
is  now  so  ingenuous  as  to  believe  that  popular  suffrage 
will  always  place  the  most  capable,  honest,  or  impartial 
men  in  municipal  offices.  The  choice,  therefore,  lies 
between  the  two  first-named  methods,  the  grant  of  leases 


AGRARIAN  CO-OPERATION  67 

to  co-operative  associations,  or  to  individual  farmers. 
The  former  has  the  approval  of  Stuart  Mill,  the  latter  of 
the  Franco-Belgian  collectivists.  The  system  of  granting 
leases  to  co-operative  associations  of  workmen  is  supposed 
to  receive  support  from  experiments  made  in  England 
and  Germany.  A  well-known  and  frequently  described 
experiment  is  that  referred  to  by  de  Laveleye  of  an 
association  founded  at  Assington  about  1 830  by  a  philan- 
thropic landowner,  J.  Gurdon.  He  established  fifteen 
labourers  on  60  acres  of  land,  each  of  whom  provided  ^^3 
towards  the  necessary  capital,  Gurdon  lending  them 
;^400;  one  of  the  co-operators,  elected  by  the  rest  and 
assisted  by  four  others,  directed  the  work  of  cultivation. 
Members  were  permitted  to  sell  their  shares,  but  only 
with  the  consent  of  the  proprietor  and  the  association. 
The  experiment  was  quite  successful,  and  the  area  of  land 
occupied  was  extended  to  130  acres.  Encouraged  by  this 
success,  Gurdon  started  another  association  under  similar 
conditions  in  1854.  This  also  was  successful.  In  this 
case  also  the  area  originally  occupied  was  largely  increased, 
the  loan  of  capital  was  repaid,  and  the  shares,  originally 
£^y  los.,  are  now  (1884)  worth  £^0. 

An  organisation  often  compared  to  these  co-operative 
agricultural  associations,  and  also  quoted  by  de  Laveleye, 
was  instituted  by  von  Thunen  upon  his  property  at  Tellow, 
in  Mecklenbourg.  Here  the  profit  made  was  divided 
amongst  the  workers,  each  receiving  an  annual  dividend, 
which  on  an  average  for  some  years  amounted  to  93-75  fr., 
whilst  some  of  the  oldest  members  had  500  thalers  (1875  f^O 
in  the  savings  bank. 

The  celebrated  English  economist,  Stuart  Mill,  followed 
by  many  contemporaneous  writers,  strongly  urged  the 
extension  of  these  agricultural  co-operative  societies, 
but  it  is  doubtful  whether,  if  the  system  were  to  become 
general,  the  result  would  be  satisfactory.  Every  one  knows 
that  the  success  of  a  laboratory  experiment  is  no  guarantee 
of  success  upon  a  large  scale,  and  the  experiments  at 
Assington  and  elsewhere  were  in  truth  nothing  but 
laboratory  experiments,  conducted  under  the  most  favour- 


68  THE  CLAIM  OF  THE  INDIVIDUAL 

able  circumstances ;  success  was  largely  due  to  the 
influence  of  their  founders,  and  the  evidence  they  give  is 
quite  inadequate  to  serve  as  a  basis  upon  which  to  found  a 
general  system  ;  this  is  thoroughly  recognised  by  the  more 
sober  advocates  of  collectivist  ownership.  There  is  indeed 
no  reason  to  suppose  that  agricultural  co-operative 
associations  initiated  without  special  protection  and 
support,  would  be  universally  or  even  generally  successful ; 
but  even  if  assured  of  success,  they  would  not  solve  the 
problem  propounded  by  collectivists.  Such  associations 
cannot  include  the  whole  of  the  inhabitants  of  a  country, 
but  only  the  more  thrifty  or  able,  or  those  who  already 
possess  some  capital.  Some  of  the  members  would 
renounce  their  shares,  the  associations  would  tend  to 
become  more  and  more  concentrated,  and  however 
numerous  these  co-operative  societies  might  be,  the 
ideal,  that  each  man  should  be  put  in  possession  of 
land,  could  never  be  realised  by  their  agency. 

De  Laveleye  illustrates  his  criticism  of  private  property 
in  land,  by  supposing  a  shipwrecked  man  to  be  cast 
upon  an  island  already  fully  occupied,  if  then  the  inhabitants 
refused  to  admit,  that  as  a  human  being,  he  possessed  a 
natural  right  to  a  share  of  the  land  occupied  by  them,  their 
only  course,  according  to  de  Laveleye,  would  be  to  throw 
him  back  into  the  sea.  In  this  case  it  would  make 
no  difference  to  the  castaway  whether  the  island  was 
owned  by  private  individuals  or  by  an  association  of 
individuals.  There  would,  however,  be  no  necessity  to 
condemn  him  to  death ;  he  could  gain  his  subsistence 
by  working  for  wages,  and  if  able  bodied  and  thrifty 
he  would  have  a  chance  of  owning  a  piece  of  the  land 
to  a  share  of  which  he  had  in  vain  urged  his  natural 
claim  as  a  human  being. 

There  are  therefore  two  objections  to  a  system  of  co- 
operative agriculture — one  that  its  success  is  uncertain,  and 
the  other  that  it  would  produce  a  privileged  class,  quite 
as  exclusive,  if  not  more  so,  than  the  class  of  individual 
proprietors ;  it  should  be  added  that  whilst  this  latter  class 
is  essentially  mobile  and  entrance  to  its  ranks  is  always 


IS  A  COLLECTIVIST  SYSTEM  POSSIBLE?     69 

open  to  every  one  who  possesses  courage  and  intelligence, 
or  who  is  thrifty,  it  would  be  far  more  difficult  to  obtain 
admittance  to  a  co-operative  association. 

In  what  way,  then,  would  it  be  possible  to  establish  a 
collectivist  system  of  land  ownership  ?  No  one  would 
now  propose  direct  cultivation  by  the  state,  nor  indeed 
is  this  plan  approved  of  by  collectivists,  a  majority  of 
whom  advocate  letting  the  land  to  individual  farmers 
for  the  benefit  of  the  community,  a  system  which 
at  first  sight  appears  to  be  both  simple  and  easy  of 
application :  its  advocates  go  so  far  as  to  assert  that 
the  establishment  of  such  a  system  would  not  affect  the 
general  organisation  of  society,  and  that  it  would  involve 
no  difficulty  of  administration  :  the  only  change  would 
be,  that  farmers  would  pay  their  rent  to  the  state  instead 
of  to  the  private  owner.  If,  however,  this  system  would 
cause  so  slight  a  disturbance  of  the  existing  social 
organisation,  how  could  it  be  expected  to  effect  the 
great  results  claimed  for  it,  and  satisfy  the  alleged  moral 
and  material  requirements  of  humanity  in  respect  of 
the  soil? 

An  attempt  has  been  made  to  demonstrate  that 
possession  of  land  is  necessary  for  every  one,  and  that 
without  it  no  true  liberty  can  exist.  On  these  grounds 
private  property  in  land  stands  condemned ;  but  what 
would  be  the  probable  effect  of  the  system  it  is  proposed 
to  substitute  for  it?  In  France,  the  land  which  to-day 
gives  occupation  to  about  20,000,000  human  beings,  of 
whom  some  7,000,000  or  8,000,000  at  least  are  pro- 
prietors,!  would  then  be  cultivated  by  the  farmers  of  the 
state.     How  would  the  general  condition  of  the  peasants 

^  According  to  the  Bulletin  de  statistique  et  de  legislation  com- 
partfe,  issued  by  the  Ministry  of  Finance  in  May  1883,  p.  601,  the 
total  number  of  rural  proprietors  (excluding  house  property)  in 
France  was  8,454,218  in  1879.  The  Agricultural  Enquiry  of  1892 
(2nd  part,  p.  249)  gives  the  number  of  owners  who  cultivate  their 
own  land  as  3,387,245  :  to  this  number  must  be  added  that  of  the 
owners  who  are  not  themselves  cultivators  and  that  of  the  members  of 
the  families  of  both  classes,  making  a  total  of  from  14,000,000  to 
15,000,000  persons. 


70  PEASANT  PROPRIETOR  AND  THE  LABOURER 

be  ameliorated  by  this  change?  Those  who  are  now 
proprietors  would  be  so  no  longer,  and  admitting  that 
from  a  pecuniary  point  of  view  they  would  not  be  losers, 
they  would  suffer  morally  by  the  loss  of  the  land  which 
they  had  loved  and  cultivated  with  so  much  care.  As 
to  the  remainder  of  the  rural  population,  they  would  be 
no  more  owners  of  the  land  than  they  are  now,  since  it  is 
merely  playing  with  words  to  assert  that  every  one  is  a 
proprietor  because  the  whole  of  the  land  belongs  to  the 
state  of  which  he  is  a  citizen.  With  the  exception  of 
those  who  became  tenants  of  the  state,  the  millions  of 
agricultural  labourers  would  have  no  other  means  of 
subsistence  than  as  wage  earners  :  they  would  work  for 
state  instead  of  for  private  farmers ;  in  what  way  would 
their  condition  be  improved  by  this  change?  Their 
position,  on  the  contrary,  would  be  altered  for  the  worse  ; 
none  of  these  labourers  would  have  his  own  plot  of 
ground  which  he  could  cultivate  when  unable  to  obtain 
employment,  or  after  his  day's  work  on  another's  land, 
and  since  the  number  of  farmers  would  be  greatly 
diminished,  the  competition  for  his  labour  would 
be   less. 

This  so-called  reform  would  therefore  be  of  no  direct 
benefit  to  the  rural  population  considered  as  a  whole. 
Would  there  be  any  indirect  advantages  to  compensate 
for  this  defect?  It  is  impossible  to  maintain  that  pro- 
duction would  increase  under  such  a  regime  more  rapidly 
than  under  the  present  system,  and  the  principal,  indeed 
the  only  possible  gain,  would  be  that  the  state  might, 
as  owner  of  the  soil,  be  able  to  remit  all  taxation  except 
that  paid  in  the  form  of  rent  by  its  farmers.  No  doubt 
we  are  assured  that  under  the  proposed  system  every 
citizen  would  possess  "  an  ideal  freedom  of  enjoyment  of 
the  public  land,"  but  since  no  one  could  use  a  spade,  or 
appropriate  a  metre  of  land,  for  growing  his  vegetables, 
or  even  walk  in  the  fields  without  the  permission  of  the 
farmers  of  the  state,  this  "  ideal  freedom  "  can  hardly  be 
looked  upon  as  a  material  advantage,  and  remission  of 
taxation   would    be   feasible   only   if   the   state   were    to 


INDEMNITY  71 

expropriate    the  proprietors    of   land    without    compen- 
sation. 

No  writer  of  any  position,  however,  advocates  a 
spoliation  so  odious,  which  would  throw  society  back 
into  barbarism.  De  Laveleye,  Schaffle,  Marx,  and 
George,  all  admit  that  private  owners  have  a  right  to 
indemnity,  and  differ  only  as  to  the  nature  and  amount 
of  the  compensation,  and  the  method  of  providing  it.  If 
the  state  were  to  indemnify  the  present  proprietors  fully, 
paying  them  the  present  value  of  their  land,  what  benefit 
would  be  derived  from  the  transaction?  Fawcett,  an 
English  writer,  shows  that  no  profit  would  accrue  to  the 
state  unless  it  were  able  to  borrow  the  amount  required 
for  purchase  at  a  rate  of  interest  less  than  the  current 
rate  obtained  by  the  capitalisation  of  land  values.  A 
simple  calculation  shows  that  purchase  by  the  state  in 
1884  would  have  involved  considerable  loss.  Land  in 
western  Europe,  free  of  all  charges  for  rates  and  taxes, 
repairs,  etc.,  does  not  bring  in  a  return  more  than  from 
2^  to  2f  per  cent,  or  in  rare  cases  3  per  cent,  on  the 
cost  of  purchase.  England,  the  state  which  is  able  to 
borrow  on  the  most  favourable  terms,  has  rarely  been 
able  to  issue  a  large  loan  under  3  per  cent. :  other 
countries  pay  from  3f  per  cent  up  to  5  per  cent  and 
even  to  6  per  cent.  A  loan  under  such  exceptional 
circumstances,  and  for  so  huge  an  amount  as  would 
be  necessary,  could  only  be  negotiated  at  a  rate  of 
interest  considerably  higher  than  that  current  at  the 
time,  and  thus  the  interest  payable  upon  the  purchase 
money  would  be  greatly  in  excess  of  the  revenue  receivable 
from  the  land  purchased.  The  state  would  therefore 
suffer  a  considerable  loss,  and,  so  far  from  being  in  a 
position  to  remit  taxation,  it  would  be  compelled  to 
increase  it.  The  operation  would,  however,  be  practically 
impossible ;  the  capital  required  does  not  exist  in  an 
available  form  in  any  country,  and  apart  from  the  issue 
of  paper  money,  a  course  which  no  doubt  would  be 
adopted  in  some  countries,  with  the  usual  well-known 
result,    the    only    feasible    means    of    payment    without 


72  A  SOCIALISTIC  EXPEDIENT 

borrowing  from  the  public,  would  be  to  assign  to  each 
landed  proprietor  a  rent  charge  equivalent  to  the  net 
revenue  of  his  estate  j  but  if  this  were  done,  the  community 
would  not  only  gain  nothing,  but  would  be  burdened  with 
the  cost  of  supervision  and  office  expenses,  and  would  not 
be  in  any  better  position  with  regard  to  the  remission  of 
taxation.  Some  prudent  souls  there  are,  who — although 
they  do  not  admit  the  existence  of  all  these  difficulties 
still  have  some  intuition  of  them — suggest  various  ex- 
pedients for  evading  them,  such,  for  instance,  as  that  of 
terminable  annuities.  Schaffle  suggests  that  the  indemnity 
should  consist  in  giving  the  proprietor  a  plethora  of 
commodities,  "une  richesse  sufifoquante  de  moyens  de 
consommation,"  for  a  term  of  years.  If  this  plan  were 
adopted,  the  state  at  the  end  of  the  term  would  be  in 
possession  of  the  land  free  from  all  charges,  and  would 
be  then  able  to  remit  taxation.  There  are,  however, 
numerous  objections  to  such  a  scheme.  If  the  state 
were  to  convert  the  perpetual  revenue  derived  from 
landed  property  into  a  rent  charge  for  a  fixed  term,  it 
would  commit  an  injustice ;  and  where  would  be  the  gain  ? 
Although  no  doubt  a  nation  may  be  considered  as  having 
a  perpetual  existence,  it  is,  in  fact,  a  succession  of  genera- 
tions, no  one  of  which  ought  to  be  sacrificed  to  another ; 
but  under  this  plan  the  citizens  living  during  the  period 
which  intervened  between  the  date  of  the  expropriation 
of  the  owners  and  the  expiration  of  the  term  of  years, 
would  suffer  severely,  not  only  from  the  tremendous 
disturbance  which  so  profound  a  change  in  the  system  of 
land  tenure  would  produce — a  disturbance  which  would 
last  for  many  years — but  also  from  the  great  cost  of  pro- 
viding the  necessary  administrative  machinery. 

Some  writers  suggest  an  expedient  for  hastening  the 
time  when  the  state  would  derive  full  benefit  from  the 
purchase  of  the  land ;  this  plan  is  explained  with  much 
frankness  by  Gide  :  ^  it  consists  in  first  imposing  a  tax 
equal  to  the  whole  net  revenue,  and  then  excepting  from  its 

*  De  quelques    nouvelles  doctrines  sur  la  proprieie  fonciire^    by 
Charles  Gide,  1883,  p.  16. 


LIMITATION  OF  INDEMNITY  73 

incidence  such  portion  of  the  amount  as  the  proprietor 
could  prove  to  represent  the  interest  and  sinking  fund  of 
capital  sunk  in  the  development  of  the  land,  but  always 
under  the  condition  that  only  such  outlay  should  be  taken 
into  account  as  could  actually  be  verified.  Thus,  supposing 
an  estate  to  return  a  net  rental  of  5000  fr.,  the  tax  would  be 
5000  fr. ;  but  if  the  owner  could  prove  expenditure  of  capital 
amounting  to  50,000  fr.,  then  1000  fr.  for  interest  at  3  per 
cent,  and  1000  fr.  for  sinking  fund,  together  2500  fr.,  would 
be  deducted,  and  the  tax  would  be  reduced  by  that  amount. 
This  procedure  would  no  doubt  be  a  convenient  one,  but  it 
is  open  to  criticism  on  two  points.  It  will  be  noticed  that 
interest  is  arbitrarily  taken  at  a  lower  rate  than  that 
usually  obtainable  on  first-rate  securities,  and  no  allowance 
is  made  for  forced  purchase,  or  for  the  loss  of  those 
amenities  of  possession  which  now  induce  a  landed 
proprietor  to  be  content  with  a  small  return  on  his  capital. 
The  reason  is  obvious :  if  a  higher  rate  had  been  fixed, 
there  would  be  many  cases  in  which  the  amount  charge- 
able against  the  state  would  be  considerably  in  excess  of 
the  net  rent  of  the  land — a  result  which  would  be  disastrous 
for  the  state,  and  which  it  is  thus  proposed  to  evade  by  what 
is,  in  fact,  downright  robbery.  The  other  criticism  is  this : 
What  justification  is  there  for  the  limitation  of  indemnity 
to  such  expenditure  of  capital  as  can  be  actually  verified — 
a  restriction  which  would  practically  confine  it  to  the 
amount  expended  by  the  actual  and  immediately  pre- 
ceding owners  ?  Here,  again,  the  object  is  to  avoid  loss  to 
the  state ;  and  the  necessity  for  such  a  limitation  is  practi- 
cally an  admission  that  the  interest  on  the  capital 
expended  on  an  estate  from  the  time  when  it  was  first 
reclaimed  or  taken  over  from  the  community,  would,  in  the 
majority  of  cases,  exceed  the  return  from  it.  How  is  it 
that  land  has  a  selling  value,  and  by  what  is  it  determined  ? 
At  some  time  or  other,  near  or  distant,  vacant,  uncultivated 
land  has,  with  the  express  or  tacit  consent  of  the  com- 
munity, been  appropriated,  enclosed,  and  cultivated  by  an 
individual;  if  sold  by  him,  or  his  immediate  successors, 
the  value  of  the  labour   and  capital  expended  upon  this 


74   OWNERS  CONVERTED  INTO  LEASEHOLDERS 

land  would  necessarily  be  taken  into  account  in  the  price 
paid  for  it  It  is  the  same  at  each  successive  sale  :  useful 
and  durable  expenditure  must  always  be  an  element  in 
the  price  paid  by  a  purchaser,  without  regard  to  the 
period  when  the  expenditure  was  incurred.  Why  should 
the  state,  in  defiance  both  of  common  law  and  common 
justice,  alone  be  relieved,  as  a  purchaser,  from  this  con- 
dition ?  The  answer  again  is  :  that  unless  the  state  were 
to  act  thus,  the  transformation  of  private  into  collectivist 
property  would  bring  no  advantage,  but  rather  a  loss  to 
the  community.  At  this  point  it  may  be  objected,  that 
in  making  these  criticisms  no  account  has  been  taken  of  an 
important  consideration — namely,  the  natural,  spontaneous, 
and  unearned  increment  of  the  soil,  a  gift  of  nature,  of 
which  the  proprietor  obtains  the  advantage  when  he 
sells  his  land.  This  variable,  and  as  a  rule  insignificant, 
element  of  value  has  already  been  referred  to,  and  will  be 
again  considered  further  on.  The  scheme  now  under 
consideration,  however,  deserves  rejection  not  only  as 
being  immoral  and  unjust,  but  also  as  being  contrary  to 
public  policy,  since  it  would  constitute  so  grave  an  attack 
upon  personal  rights,  that  all  contracts  would  become 
insecure ;  and  the  spirit  of  thrift  and  initiative,  in  all 
branches  of  social  activity,  would  be  stifled  by  the  dread 
lest  the  state,  arbitrarily  fixing  the  amount  of  indemnity, 
should  one  day  lay  its  heavy  hand  upon  all  commercial  and 
professional  incomes. 

Of  all  the  schemes  suggested  for  establishing  a  system 
of  agrarian  collectivism  without  resort  to  forcible  expro- 
priation, one  of  the  most  ingenious  is  that  proposed  by 
Gide.  ^  It  is,  that  the  state  should  offer  proprietors  an 
immediate  payment  for  their  property,  possession  to  be 
given  at  the  end  of  ninety-nine  years.  Gide  thinks  that 
such  a  proposal  would  be  readily  accepted,  and  that  since 
ninety-nine  years  is  for  each  individual  practically  equivalent 
to  perpetuity,  the  offer  would  be  looked  upon  as  a  gift,  and 
therefore  that  the  price  demanded  for  the  land  would  not  be 
exorbitant.  The  state  would  thus  secure  the  land  on 
^  Gide,  op.  cit^f  p.  22. 


AN  INSULT  TO  HUMAN  NATURE  75 

moderate  terms.  Gide  could  discover  only  two  objections 
to  the  scheme,  one  being  that  collectivists  would  con- 
sider the  realisation  of  their  hopes  to  be  too  long 
delayed,  the  other,  that  it  is  open  to  criticism  on  the 
ground  of  morality,  in  that  it  proposes  to  take  advantage 
of  the  want  of  prevision  and  the  selfishness  of  men  in 
order  to  despoil  their  descendants. 

This  scheme,  ingenious  as  it  is,  is  unsound  from  a 
psychological  point  of  view,  and  consequently  as  a  basis  of 
calculation  for  indemnities.  To  believe  that  man,  himself 
shortlived,  is  indifferent  to  the  future,  is  to  misunder- 
stand human  nature  and  to  ignore  the  facts  of  daily 
life.  A  man  in  the  prime  of  life  will  purchase  the 
perpetual  concession  of  a  place  of  sepulture.  The  records 
of  insurance  offices  and  family  settlements  prove  that  the 
desire  to  secure  to  children  or  to  relatives  and  their 
descendants  in  perpetuity,  the  possession  of  property 
amassed  or  inherited  by  the  individual,  is  common  to  all 
humanity,  and  is  a  potent  influence  in  determining  human 
action.  It  is  a  strange  illusion  and  an  insult  to  human 
nature  to  imagine  that  men  are  at  once  so  rapacious  and 
so  shortsighted,  as  to  be  tempted  by  a  small  immediate 
bribe  to  exchange  a  perpetual  tenure  for  a  ninety-nine 
years'  lease.  It  would  indeed  be  necessary  to  increase 
the  amount  offered  very  largely  in  order  to  overcome 
the  disinclination  of  proprietors  to  accept  it ;  and  if 
increased  to  a  sufficient  amount,  it  would  impose  a 
crushing  burden  on  the  state  for  ninety -nine  years, 
on  the  vain  pretext  that  at  the  end  of  this  period  taxation 
would  cease.  It  would  be  far  less  costly  to  establish 
a  sinking  fund  for  the  reduction  of  public  debt,  by 
means  of  which  in  thirty  or  forty  years  the  budget  might 
be  very  materially  reduced.  A  further  difficulty  which  this 
scheme  would  encounter  lies  in  the  exaggerated  idea  which 
owners  have  of  the  value  of  their  property — always  far  in 
excess  of  that  which  it  would  fetch  at  a  forced  sale — and 
since  under  this  scheme  the  price  is  to  be  settled  by 
consent,  this  conviction  would  seriously  affect  the  amount 
to  be  paid  by  the  state.     Another,  and  not  the  least,  objec- 


76  LIMITATION  OF  SUCCESSION 

tion  to  the  scheme,  is  that  proprietors,  when  transformed 
into  tenants,  would  be  keenly  alive  to  the  progressive 
diminution  of  the  term,  and,  as  it  drew  near  to  the  end,  would 
cease  to  perform  all  but  immediately  necessary  work  ;  the 
decay  of  agriculture  would  thus  proceed  at  an  accelerating 
rate.  If  the  state  were  to  attempt  to  provide  against  this 
by  agreement,  the  necessary  arrangements  would  be 
extremely  complicated,  and  it  would  in  any  case  be  difficult 
to  induce  the  possessor  of  a  rapidly  expiring  tenancy  to 
devote  real  and  efficient  care  to  property  so  soon  to  pass 
from  his  possession.  A  last  and  fatal  objection  to  this 
arrangement  under  which  a  limited  tenancy  is  to  be  given 
in  exchange  for  a  freehold,  is  that  the  poorest  peasant,  as 
well  as  the  richest  proprietor,  would  feel  that  in  giving  the 
state — capricious  and  arbitrary,  but  always  irresistible — 
rights,  however  remote,  over  his  land,  he  would  be  taking 
a  course  fraught  with  the  gravest  possibilities,  and  would 
feel  that  a  far  higher  inducement  than  that  offered  would 
be  no  adequate  compensation  for  risks  which  although 
indistinctly  understood  would  be  vividly  present  to  his 
imagination. 

Amongst  the  many  schemes  for  the  conversion  of 
private  property  into  common  property,  there  is  one  which 
seems  at  first  sight  to  be  both  simple  and  practicable,  and 
which  has  the  approval  of  de  Laveleye,  Stuart  Mill,  and 
many  other  publicists :  it  is  neither  more  nor  less  than  the 
restriction  of  the  right  of  succession  to  the  sixth  or  seventh 
degree  of  relationship.  Cremieux,  a  member  of  the 
provisory  government  of  1848,  advocated  restriction  of 
succession  to  the  issue  of  cousins-german ;  others  went 
further  and  proposed  that  cousins-german  themselves 
should  be  the  last  in  the  line  of  succession.  It  would 
be  possible  to  go  further  in  this  direction  without 
securing  any  but  the  most  insignificant  results.  Unless 
the  right  of  testamentary  disposition  of  property  were 
annulled,  those  who  had  anything  to  bequeath  would  take 
care  that  it  should  not  be  absorbed  by  the  state.  If,  how- 
ever, testamentary  disposition  were  not  permitted,  grave  evils 
would  at  once  arise,  evasion,  gifts  during  life,  investments 


INCREASE  OF  SUCCESSION  DUTY  77 

in  life  annuities,  the  abandonment  of  thrift,  and  the  pre- 
mature cessation  of  efforts  to  acquire  wealth — in  short,  the 
result  would  be  the  diminution  of  natural  production  and 
capital. 

Another  plan  suggested,  is  to  increase  the  succession 
duty  payable  by  collateral  descendants.  In  France  these 
duties  have  been  very  high  since  1901,  amounting  to 
from  14  per  cent,  to  18^  per  cent,  or  with  stamps  and  other 
expenses,  to  as  much  as  20  per  cent.  In  1900,  with  the 
duty  at  from  8.22  per  cent,  to  11.25  P^^  cent,  i4i,ocx),ooofr. 
were  received.  Supposing  this  duty  were  doubled,  and 
that  the  receipts  increased  in  the  same  proportion,  the 
state  would  receive  an  additonal  150  to  160  millions 
annually.  In  this  case,  since  the  land  in  France  is  valued 
at  from  no  to  120  milliards  of  francs,  it  would  require  six 
or  seven  centuries  to  complete  the  total  absorption  of 
the  land  by  the  state ;  but  it  is  very  improbable  that  so 
large  an  additional  return  would  be  realised,  since  as  too 
high  a  duty  encourages  smuggling,  so  would  too  heavy 
a  succession  tax  lead  to  its  evasion.  If  the  state,  as  is 
suggested,  were  to  employ  the  money  thus  obtained  in  the 
purchase  of  land,  its  selling  value  would  be  increased 
to  an  extent  proportionate  to  the  sums  thus  disposed 
of,  and  from  the  point  of  view  of  return  upon  capital 
expended,  the  operation  would  thus  become  continually 
less  and  less  efficacious.  The  imposition  of  heavy  taxes  on 
successions  does  not  appear  to  be  worth  while,  in  order  to 
secure  an  end  of  such  questionable  utility,  and  one  which 
might  be  attained  in  other  ways  and  without  a  delay  of 
many  centuries. 

It  is  maintained  that  whether  the  state  buys  the 
whole  or  only  a  part  of  the  land,  it  would  receive  the 
"  unearned  increment,"  which  now  goes  to  swell  the 
revenues  of  the  owner  without  effort  on  his  part  Facts 
have  shown,  however,  that  this  phantom  of  "  unearned 
increment,"  which  still  haunts  the  minds  of  many 
economists,  has  no  real  existence.  It  was  Ricardo, 
whose  brain  was  fertile  in  abstract  ideas,  who  invented 
the  famous  law  from  which  his  mystified  disciples  drew 


78      HYPOTHETICAL  PURCHASE  BY  STATE 

the    inference   that   revenue   from   land    would    increase 
spontaneously  and  continually. 

If  the  earth  were  fully  inhabited,  and  all  land  capable 
of  cultivation  were  fully  cultivated — if  the  art  of  agricul- 
ture were  no  longer  able  to  add  to  the  productiveness 
of  the  soil,  and  if  all  these  conditions  were  to  occur 
simultaneously,  then  no  doubt  the  rent  of  land  would 
continually  increase,  and  the  phenomenon  of  "  unearned 
increment"  would  become  a  normal  incident  of  the 
ownership  of  land ;  facts,  however,  lend  no  support 
to  this  imaginary  conception.  In  the  Essai  sur  la 
repartition  des  richesses}  it  has  been  shown  that  in 
France  the  total  increase  in  rent  from  185 1,  or  even  from 
1 82 1  up  to  1884,2  was  barely  equal  in  amount  to  the 
interest  calculated  at  the  average  rate  of  investment  on 
the  fresh  capital  which  during  this  period  had  been  sunk 
in  the  land.  Suppose  that  in  181 5  or  1820  the  English 
parliament,  misled  by  the  Ricardian  theory  of  rent,  had 
bought  up  all  the  land  in  the  United  Kingdom,  and 
relet  it  to  farmers,  in  the  belief  that  the  constant  and 
spontaneous  increment  on  the  land  would  make  it 
possible,  without  inflicting  loss  on  any  one,  to  increase  the 
national  revenue  from  rent  at  the  expiration  of  the 
leases,  say  in  fifteen  or  eighteen  years  after  the  comple- 
tion of  the  purchase ;  at  this  date,  however,  agriculture 
was  in  a  very  depressed  condition,  and  the  tenants,  far 
from  agreeing  to  an  increase,  would  have  declared  a 
reduction  of  rent  to  be  absolutely  necessary  to  save  them 
from  ruin.  The  state  would  have  been  compelled  to 
grant  a  reduction  of  from  10  per  cent,  to  20  per  cent.,^ 
and  the  loss  sustained,  although  theoretically  quite 
incorrect,  would  have  been  a  real  one,  which  it  would 
have  been  necessary  to  meet  by  the  imposition  of 
increased    taxation :    disgusted    by    this  experience,  the 

*  P.  Leroy  Beaulieu,  op.  cit.,  chapter  iii. 

[2  The  first  edition  oi  Le  CollecHvisme  appeared  in  1884.] 

3  This,  in  fact,  is,  according  to  the  trustworthy  evidence  of  Porter, 

the  actual  average  of  the  reduction  of  land  rents  from   1820  to 

1840. 


THE  RESULT  70 

state  would  probably  have  abandoned  the  collectivist 
system,  and  would  have  re-sold  the  land  to  private 
persons.  After  the  lapse  of  a  further  twenty-five  years, 
rents,  which  had  decreased  between  the  years  1820-30 
and  1840-50,  began  to  rise.  Suppose,  then,  that  Stuart 
Mill,  a  writer  of  singular  penetration  and  sagacity,  but  of 
all  men  one  of  the  most  ignorant  of  the  facts  of  every- 
day life,  had  urged  the  state  again  to  purchase  the 
land,  on  the  ground  that  the  first  experience  had  been 
made  under  unfavourable  circumstances,  and  rendered 
abortive  by  accidental  causes,  such  as  the  development  of 
maritime  commerce  and  the  abolition  of  the  corn  laws, 
but  that  the  natural  and  spontaneous  increment  of  land 
had  re-asserted  itself,  and  would  continue  in  future  in 
conformity  with  economic  law,  and  suppose  that  the 
state,  persuaded  by  the  tenacity  with  which  Stuart  Mill 
and  his  disciples  proclaimed  their  conviction,  had  again 
purchased  the  whole  of  the  land  about  the  year  i860. 
For  the  first  few  years  all  would  have  gone  well,  leases 
would  have  expired  and  have  been  renewed  at  an 
increased  rent,  but  during  the  period  1875-80,  owing  to  a 
variety  of  causes,  an  agricultural  crisis,  both  intense  and 
of  long  duration,  again  supervened,  and  the  state 
would  once  more  have  been  compelled  to  reduce  the 
rents  in  many  cases  by  10  per  cent,  more  often  by 
20  per  cent.,  and  in  some  cases  by  as  much  as  30  to 
40  per  cent.,  with  a  resulting  loss  of  revenue,  which 
would  have  amounted  to  many  millions  sterling  annu- 
ally. Thus  the  purchase  of  the  land  by  the  state,  so 
far  from  making  it  possible  to  reduce  taxation,  would 
have  made  a  large  increase  unavoidable.  Although  the 
case  is  merely  supposititious,  it  cannot  be  denied  that 
if,  under  the  influence  of  Ricardo  or  Stuart  Mill,  the 
English  state  had  purchased  the  land,  this  is  what  in  all 
probability  would  have  happened.  In  France  it  would 
have  been  the  same.  Suppose  that  the  revolution  of 
1870,  in  place  of  having  been,  as  it  actually  was,  the 
result  of  a  military  catastrophe,  had  been  brought  about 
by  a  social  movement,  and  that  the  state  believing,  upon 


80  "UNEARNED  INCREMENT" 

the  authority  of  Ricardo,  Stuart  Mill,  and  other  economists, 
that  it  might  safely  count  upon  the  profit  arising  from  the 
spontaneously  increasing  value  of  the  soil,  had  purchased 
the  land,  and  that  the  operation  had  been  completed  in 
1875.  The  state  would  have  awaited  with  impatience 
the  termination  of  the  first  leases,  before  which  time  it 
could  realise  no  profit  from  its  purchase  ;  but  the  loss  on 
vineyards,  owing  to  the  phylloxera  in  the  south,  bad 
seasons,  low  prices,  and  foreign  competition  in  the  north, 
would  have  made  it  impossible  to  renew  the  leases  except 
at  a  reduction  of  rent,  and  the  state  would  have  been 
obliged  to  impose  fresh  taxation  to  supply  the  hundreds 
of  millions  of  francs  lost  annually  by  its  rash  adventure. 
Experience  shows  that  this  would  have  been  the  course 
of  events.  It  may  be  objected  that  the  circumstances  were 
accidental — even  so,  they  ought  to  be  taken  into  considera- 
tion ;  but  can  it  be  said  that  they  were  in  any  true  sense 
accidental  ? 

The  dogma  of  "  unearned  increment "  is  not  founded 
upon  general  observation  :  it  is  but  a  figment  of  the 
brain  of  certain  philosophers,  who  have  assumed  that  a 
fortuitous  combination  of  circumstances  existing  at  one 
moment  of  history  was  a  normal  condition.  The  earth 
is  limited  in  extent,  they  said,  and  the  human  race 
incessantly  increases :  therefore  the  value  of  the  produce 
of  the  earth  must  continually  rise.  Of  the  two  terms  of 
this  proposition,  the  first  alone  is  certain :  the  earth  no 
doubt  is  limited,  but  nearly  one-half  of  it  is  but  thinly 
inhabited  and  hardly  explored.  Even  when  the  whole 
world  is  peopled  with  an  average  of  eighty  to  a  hundred 
inhabitants  per  square  kilometre  (which  is  greater  than 
the  present  density  of  the  French  population),  there  is  no 
certainty  that  the  rent  of  the  land  would  go  on  increasing ; 
the  continuous  increase  of  population,  which  it  is  the 
custom  to  consider  as  being  the  law  of  nature,  may  well 
be  only  a  transient  historical  fact.  It  is  no  longer 
possible  to  speak  on  this  subject  with  the  certainty  of 
Malthus ;  since  his  book  was  published,  two  phenomena 
have  occurred — the  almost   complete   stagnation   of  the 


WILL  POPULATION  CONTINUE  TO  INCREASE?    81 

French  population,  and  that,  almost  equally  complete,  of 
the  Anglo-Saxon  inhabitants  of  the  United  States.  What 
certitude  is  there  that  other  nations  will  not  fall  into  a 
similar  condition  ?  Who  can  guarantee  that  when  well- 
being  has  been  universally  developed,  and  democratic 
ideas  have  spread,  the  fecundity  of  all  the  peoples  of  the 
world  will  not  be  either  naturally  or  artificially  restricted  ? 
The  various  causes  which  preclude  a  continuous  rise  of 
rent  are  fully  described  in  the  work  to  which  reference 
has  been  made ;  ^  it  is  sufficient  here  to  refer  to  one  only 
— the  improvement  of  agriculture. 

Every  proprietor  who  improves  his  land  is  uncon- 
sciously assisting  to  lower  rent.  Supposing  that  all  owners 
were  simultaneously  to  effect  so  great  an  improvement  as 
to  double  the  produce  of  the  soil,  prices  would  fall,  and 
rents  would  have  a  tendency  to  diminish.  Who  can  assign 
any  limit  to  improvements  and  fresh  discoveries  in  the  art 
of  agriculture  ?  If,  then,  a  material  increase  in  production 
were  to  coincide  with  a  slackening  of  increase  of  popula- 
tion, would  not  the  necessary  consequence  be  a  reduction, 
not  only  of  rent  in  the  theoretical  and  abstract  sense,  but 
in  the  total  revenue  derived  from  land,  including  the 
interest  on  the  capital  invested  in  real  estate  ?  In  buying 
land,  therefore,  in  the  hope  that  a  continuous  increase  of 
return  from  it  would  make  the  operation  a  profitable  one, 
the  state  would  be  undertaking  a  very  hazardous  specula- 
tion, which,  at  any  rate  during  the  two  periods  referred  to, 
would  have  proved  the  reverse  of  profitable,  and  which  in 
the  future,  near  or  distant,  offers  no  better  prospect  of 
success. 

What  has  been  said  of  rural,  is  also,  but  in  a  less 
degree,  true  of  urban  property.  It  is  a  maxim  that  land 
in  cities  continually  increases  in  value,  and  its  truth  is 
illustrated  by  reference  to  great  cities,  such  as  Paris, 
London,  or  New  York.  Whether  such  a  statement  is 
permanently  true  or  not  in  respect  of  these  cities  must 
depend  upon  the  indefinite  continuance  of  the  increase  of 

^  Repartition  des  richesses ;  and  see  also,  Traite  thhrique  et pratique 
d'ecofwmie politique^  P.  Leroy  Beaulieu,  3rd  ed.,  vol.  i.,pp.  74I-75' 

F 


82  CITIES  THAT  HAVE  FALLEN 

their  population  and  prosperity,  a  supposition  for  which 
history  affords  no  support.  Side  by  side  with  cities  that 
have  risen,  we  find  those  that  have  fallen.  Florence  and 
Venice  are  but  moderately  prosperous,  and  Rome  has 
never  regained  the  population  of  the  palmy  days  of  the 
Empire.  History  abounds  with  the  names  of  majestic  cities 
which  have  altogether  disappeared,  or  are  now  represented 
only  by  little  boroughs.  Apart  from  political  catastrophes, 
many  causes  may  contribute  to  impede  the  increase  of 
great  towns,  or  to  convert  their  progress  into  retrogression. 
Again,  the  economic  forces  which  create  prosperity  may 
lose  their  energy  or  cease  to  be  ;  no  doubt  the  continued 
growth  of  great  cities  during  the  next  half-century,  or  even 
longer,  is  probable ;  but  vicissitudes  must  be  expected  :  and 
to  say  that  one  or  two  hundred  years  hence  Paris  will 
still  be  growing  and  house  rent  still  rising,  would  be  a 
mere  guess ;  indeed,  the  continual  improvement  in  locomo- 
tion makes  a  contrary  supposition  more  likely  to  be 
correct.  Apart  from  other  reasons,  therefore,  the  state 
would  incur  a  serious  risk,  if,  relying  upon  a  hypothetical 
increase  of  value,  it  were  to  purchase  house  property  in 
cities. 

In  attempting  to  put  the  state  in  the  place  of  the 
individual  owner,  and  to  transfer  to  the  former  the 
functions  proper  to  the  latter,  the  true  economic  position 
of  a  proprietor  is  lost  sight  of.  A  private  owner  is  guided 
by  one  simple  rule — his  own  interest — which  is,  to  let  his 
house  to  the  best  advantage ;  but  the  state  occupies  an 
entirely  different  position :  it  is  not  like  an  individual, 
autonomous  and  free,  and  accountable  only  to  himself;  it 
is,  on  the  contrary,  an  extremely  complex  being,  whose 
actions  are  determined  by  motives  which  are  both 
numerous  and  embarrassing.  The  more  complete  the 
change  from  an  absolute  to  a  democratic  form  of  govern- 
ment, with  rulers  popularly  elected  for  short  periods,  the 
more  unsuited  does  the  state  become  for  the  new  function 
it  is  proposed  to  assign  to  it.  The  governing  body  in  a 
democracy  is  not  a  permanent  entity  which  represents 
the  whole  nation :  it  is  merely  the  mouthpiece  of  a  party 


DEMOCRACY  A  BAD  LANDLORD     83 

temporarily  in  a  majority,  by  which  it  is  appointed,  and 
whose  interests  it  furthers  with  but  little  scruple.  To  say 
that  a  government  thus  created  can  be  impartial,  is  a 
contradiction  both  in  word  and  in  fact.  It  is  swayed  by 
many  impulses,  of  which  the  most  potent  are  not  those 
which  represent  the  interests  of  the  nation  as  a  whole,  but 
of  the  majority  of  the  electorate  for  the  time  being.  Thus 
conditioned,  the  state  cannot  adequately  perform  even  the 
limited  functions  of  a  great  private  owner,  such  as  the 
Duke  of  Westminster ;  it  is  less  sure  of  its  employees,  and 
its  administration  is  far  more  open  to  corruption,  especially 
of  that  insidious  kind  which  consists  not  in  gifts  of  money 
but  in  favouritism. 

Modern  democratic  administration  is  essentially 
negligent  and  partial,  and  these  defects  are  not  transitory, 
but  inherent  in  its  nature ;  concentrated  and  permanent 
authority,  such  as  that  of  the  Prussian  monarchy,  would 
indeed  be  less  ill  adapted  for  the  role  which  collectivists 
desire  to  confer  on  the  state. 

The  duties  performed  by  a  good  landowner  are  many. 
It  is  an  error  to  imagine  that  all  he  does  is  to  collect 
his  rents  and  renew  his  leases,  although  this  demands 
both  intelligence  and  judgment.  His  proper  function  is  that 
of  a  guardian,  whose  task  it  is  to  watch  over  and  protect 
the  permanent  interests  of  his  property,  and  to  carry  out 
improvements,  profitable  only  in  the  future,  such  as  the 
reclamation  of  land,  afforestation,  etc.  It  is  by  a  proprietor 
only,  that  such  work  can  be  efficiently  performed ;  and  his 
estate  prospers  or  deteriorates,  according  to  his  zeal  and 
intelligence,  or  his  negligence  and  ignorance.  In  other 
ways  a  proprietor  fulfils  a  useful  rdle  by  making  advances, 
when  needful,  to  his  farmers,  by  remission  of  rent,  or  by 
granting  extension  of  time  for  payment ;  and  being,  as  a  rule, 
better  educated,  and  having  wider  views  than  his  tenants, 
he  is  able  to  assist  them  by  advice  and  suggestions.^ 

[*  The  following  extract  from  a  recently  published  book  affords  a 
striking  example  of  the  improvement  of  a  district  by  an  intelligent 
and  liberal  proprietor  : — 

A  comparison  of  the  condition  of  the  estate  of  Holkham,  in  Norfolk, 


84  THE  DUTY  OF  LANDLORDS 

To  affirm  that  owners  everywhere  perform  these 
duties,  would  be  to  assert  a  condition  to  be  universally, 
which  is  only  generally,  true  ;  it  is,  however,  their  proper 
business,^  and  requires  close  attention  to  small  details  and 
the  keeping  of  complicated  accounts ;  it  is  a  task  which  it 
would  be  impossible  to  perform  under  strict  and  meticulous 
regulations,  and  in  working,  it  offers  great  opportunities 
for  favouritism,  corruption,  and  collusion.  The  state, 
therefore,  with  its  official  personnel  and  its  pedantic  and 
uniform  rules,  would  be  quite  incapable  of  performing 
it  with  success. 

In  Java,  where  state  cultivation  is  carried  on  upon  a 
very  large  scale,  the  sugar  and  coffee  plantations  cover 
203,460  hectares,  and  give  employment  to  about  2,000,000 
souls.  From  these  estates,  in  addition  to  land  rents  and  the 
produce  of  the  mines,  the  Dutch  Government  received  in 
1871  a  net  revenue  of  25,688,000  florins,  or  51,000,000 
to  52,000,000  fr.  De  Laveleye  quotes  these  figures  as  an 
instance  of  the  advantages  of  collective  ownership ;  but 
the  cultivation  of  sugar  and  coffee  is  of  a  very  simple 
nature,  and  the  labour  required  is  consequently  of  a 
uniform  and  industrial  character,  differing  widely  from  the 

in  1776  (when  it  was  a  barren  and  treeless  waste  of  gravel,  shingle,  and 
sea  marshes)  and  1818. 

1776.    Rental  ;^22oo.  1818.     Rental  ;^2o,ooo 

No  meadows.  Grass  fields  and  water  meadows. 

No  wheat  produced.  Rich   fields    and    large    sales   of 

wheat. 
No  trees.  Forest  of  3000  acres. 

Annual  tree  felling  £2yoo. 
Population  under  200,  Population  iioo. 

Supported  by  poor  farming,  poor    All  earning  their  living. 

rates,  and  smuggling. 
Workhouse  always  full.  No    paupers  ;   workhouse   pulled 

down. 

— Coke  of  Norfolk  and  his  Friends,  A.  M.  W.  Stirling,  1907.] 

^  Proudhon  says  :  "  To  occasion  the  failure  of  the  agricultural 
industry  in  most  places,  or  at  least  to  arrest  its  progress,  it  is  perhaps 
sufficient  to  convert  the  tenants  into  owners." — {Contradictiofis 
dconomiqucs^  vol.  i.,  4th  ed.,  p.  185). 


COLLECTIVE  PROPERTY  IN  JAVA  85 

diverse  methods  of  cultivation  which  are  necessary  in 
Western  Europe.  It  must  also  be  noted  that  the  popula- 
tion in  Java  is,  if  not  actually  servile,  destitute  of  indepen- 
dence, and,  intellectually,  of  so  low  a  type  that  the  foreign 
overseers  and  native  chiefs  find  it  possible  to  enforce 
severe  discipline  without  encountering  resistance.  The 
prosperity  of  Java,  moreover,  has  not  continued  without 
breaks,  and  at  the  present  time  appears  to  be  decreasing.^ 
It  is  evident  that  the  Javanese  system  of  collective  property, 
supported  as  it  is  by  forced  labour,  is  far  from  offering  a 
model  for  introduction,  still  less  for  general  adoption,  in 
Europe.^  Nor  is  the  successful  administration  of  the 
church  funds  in  England,  which  amount  to  ^i/yDopoo 
fr.  (;^i,053>OOo),  an  example  in  favour  of  collective  as 
opposed  to  individual  ownership.  There  is  an  essential 
difference  between  a  system  under  which  property,  although 
collectively  owned,  is  managed  in  the  same  way  as  private 
property,  and  a  riginie  under  which  all  property  is  owned 
by  the  state.  The  managers  of  great  co-operations  or 
joint  stock  companies  always  have  greater  liberty  of  action 
than  the  servants  of  the  state ;  they  are  subjected  to  less 
rigorous  and  less  uniform  regulations,  and  are  selected 
with  more  regard  to  their  technical  competence  than  the 
officials  of  a  democratic  government ;  and  thus,  as  might  be 
expected,  experience  has  shown  that  when  property  has 
passed  from  collective  ownership  into  private  hands,  it  has 
in  most  cases  increased  both  in  capital  value  and  in 
revenue. 

Another  instance  quoted  by  de  Laveleye — that  of  the 
Austrian  society  of  state  railways  known  as  the  "  Staats- 
bahn  " — is  no  more  conclusive.  This  society  possesses  in 
the  "Bannat"  an  estate  of  130,000  hectares,  and  is  said  to 
have  developed  agriculture,  opened  coal  and  other  mines, 

*  See  De  la  Colonisation  chez  lespeuples  Modemes,  5th  ed.,  p.  274 
et  seq.,  Paul  Leroy  Beaulieu. 

2  States  which  possess  landed  property  or  land  rents,  find  these 
sources  of  revenue  a  cause  of  much  financial  embarrassment ;  thus,  the 
fact  that  the  land  tax  is  the  principal  impost  in  India,  causes  great 
difficulty  in  framing  the  budget.    See  de  Laveleye,  op.  cit.^  p.  358. 


86  THE  "STAATSBAHN"  OF  AUSTRIA 

regulated  the  use  of  forests,  established  factories,  and  to 
have  increased  general  production  considerably.  This 
may  be,  but  the  fundamental  dissimilarity  between  a 
corporation  or  company,  however  large,  and  the  state, 
remains  the  same;  the  spirit  which  animates  the  one  is 
essentially  different  from  that  which  directs  the  other. 
The  officials  of  a  prosperous  society,  who  feel  secure  in  the 
permanence  of  their  position,  and  who  are  often  able  to 
transmit  their  functions  to  their  sons,  insure  stability  of 
direction,  in  place  of  the  instability  and  want  of  elasticity 
of  the  administration  of  a  modern  democratic  state.  All 
comparison,  therefore,  of  private  associations,  however  vast, 
with  state  administration,  is  essentially  defective  and 
misleading ;  but  although  more  efficient  than  the  state,  the 
best  administered  association  is  but  an  indifferent  manager 
of  rural  property.  In  the  instance  referred  to,  the  130,000 
hectares  of  rich  soil  possessed  by  the  Austrian  society 
ought  to  return  at  least  6,000,000  to  7,000,000  fr.  net 
revenue ;  but  in  1 880  the  total  net  revenue  shown  by  the 
accounts  of  the  company  was  only  about  2,000,000  fr. ;  nor 
was  even  this  revenue,  so  far  as  regards  the  larger  part  of 
it,  derived  from  agricultural  property.  The  foundries 
which  produce  rails  and  machinery,  of  which  the  society  is 
purchaser  as  well  as  producer,  supply  the  larger  part  of  the 
revenue,  and  agriculture  cannot  be  credited  with  a  return 
of  more  than  about  10  fr.  per  hectare.^  In  Algeria  there 
are  many  societies  holding  vast  estates  under  concessions 
which  for  the  most  part  are  gratuitous,  and  which  have 
been  worked  for  twenty  to  thirty  years.  These  estates 
give  but  a  very  small  return,  and  it  seems  probable  that 
the  greater  part  of  them  will  end  by  being  sold  to  private 
owners. 

Sufficient  evidence  has  now,  it  is  believed,  been 
adduced  to  prove  that  eulogy  of  the  collectivist  ownership 
of  land  is  founded  upon  imperfect  observation  and  false 
analogy. 

On  the  other  hand,  is  it  possible  to  maintain  that  a 

*  See  the  Revue  itconomique  etfinanciere  du  Zjuillet  1882,  p.  484, 
"  Report  of  the  Imperial  and  Royal  Austrian  Society  of  State  Railways." 


PRIVATE  OWNERSHIP  A  NATIONAL  BENEFIT  87 

single  one  of  the  chief  complaints  against  private  owner- 
ship is  well  founded?  or  to  uphold  the  assertion  that  it 
has  now  lost  all  social  character,  and  exists  only  for  the 
benefit  of  the  owner  ?  It  is  no  doubt  true  that  the  duty  of 
acting  as  the  pioneer  and  guardian  of  the  rural  population 
no  longer  falls  upon  the  owner  of  land.  It  is  also  true  that 
the  spirit  of  democracy  has  diminished  his  sense  of  moral 
responsibility  as  a  proprietor,  and  his  readiness  to  accept 
it,  whilst  at  the  same  time  it  has  weakened  the  old  habits 
of  deference  and  the  willingness  of  the  peasants  and 
labourers  to  accept  his  guidance;  but  it  does  not  follow 
that  private  ownership  has  therefore  entirely  lost  its  social 
character,  and  exists  only  for  personal  advantage.  It  still 
continues  to  be  of  the  greatest  advantage  to  the  commun- 
ity, because  it  is  by  means  of  this  system  alone  that  the 
best  results  can  be  obtained  from  accumulated  capital,  and 
acquired  knowledge,  for  the  improvement  of  agriculture 
and  the  productiveness  of  the  soil.  The  interest  of  the 
owner  is  almost  always  identical  with  that  of  the  consumer. 
Maximum  net  revenue  in  nearly  every  instance  is  in 
direct  proportion  to  maximum  gross  revenue ;  in  fact,  an 
estate  is  productive  only  when  cultivated.  Instances  may 
no  doubt  be  found  which  appear  to  invalidate  the  truth  of 
these  assertions.  Marx  lays  much  stress  upon  the 
existence  of  the  great  sporting  estates  in  the  north  of 
England  and  Scotland  ;  ^  but  these  exceptions,  the  import- 
ance of  which  he  greatly  exaggerates,  and  of  which  no 
examples  are  to  be  found  in  France,  are  not  attributable  to 
a  freely  organised  system  of  private  property:  they  are 
the  result  of  the  laws  of  entail  and  of  administration  by 
trustees — that  is,  of  conditions  which  are  quite  opposed  to 
modern  doctrines  of  private  ownership — and  there  is 
nothing  to  hinder  the  government  from  passing  measures 
to  remedy  inconveniences  arising  from  this  cause,  should 
they  be  found  excessive. 

Some  so-called  abuses  of  the  rights  of  private  owner- 
ship, although    apparently    detrimental,    are    in    reality 

*  "  Verwandlung  von  Ackerland  in  Schaftriften  und  von  Schaft- 
riften  in  Jagdrevier,"  Karl  Marx,  Das  Kapital,  p.  761* 


88  ADVANTAGE  OF  PRIVATE  PARKS 

advantageous  to  the  community — such,  for  instance,  is  the 
case  of  the  enclosure  of  large  areas  for  private  parks 
which  to  the  thoughtless  appears  to  be  an  intolerable 
grievance  ;  but  it  is  of  considerable  public  utility  that  a 
certain  number  of  such  enclosures  should  exist  In  every 
district.  In  addition  to  the  preservation  of  the  picturesque 
aspect  of  the  landscape,  the  country  is  by  this  means 
protected  against  the  total  destruction  of  the  forests  and 
consequent  danger  of  drought;  water-courses  are  regu- 
lated, birds,  the  destroyers  of  insect  pests,  are  preserved, 
and  each  of  these  oases  of  turf  and  trees  constitutes 
a  centre  of  freshness  and  fertility  for  the  surrounding 
area. 

In  another  way,  again,  private  ownership,  although 
deprived  of  all  political  influence,  retains  its  social 
character.  Whether  intentionally  or  not,  a  large  pro- 
prietor acts  as  a  teacher  and  an  initiator  by  whose 
example  and  experience  the  surrounding  population 
profits.  Hereditary  succession  no  longer  secures  for 
spendthrifts  the  continued  possession  of  great  estates, 
which  in  such  cases  generally  pass  into  the  hands  of 
manufacturers,  merchants,  or  professional  men,  who  have 
made  their  fortunes,  and  who  represent  the  energy  and 
enterprise  of  their  country.  Such  people  take  a  pride  in 
improving  the  property  they  have  acquired,  and  their 
advent  has  a  beneficial  effect  upon  the  rural  population. 
They  compete  for  tenant  farmers,  who  in  their  turn 
compete  for  workmen,  and  as  a  result  the  labourers 
obtain  higher  wages  than  they  would  be  likely  to 
obtain  from  a  single  proprietor  free  from  all  com- 
petition, such  as  the  state  would  be,  if  owner  of  the 
whole  of  the  land. 

Thus,  an  accurate  observer,  in  place  of  finding  that  a 
proprietor  obtains  a  continuously  increasing  revenue  from 
his  land,  is  led  to  the  conclusion  that  of  the  three  classes 
composing  the  rural  population,  the  labourers  have  bene- 
fited most  during  the  last  century,  then  the  farmers,  and 
lastly  the  proprietors,  who  as  a  whole,  have  not,  since  1821, 
and  especially  since  185 1,  received  in  the  form  of  increased 


FACTS  IGNORED  BY  COLLECTIVISTS         89 

rent  even  a  moderate  interest  upon  the  capital  they  have 
expended  upon  improvements  during  that  period. 

All  these  facts,  which  are  indubitable,  are  ignored  by 
the  advocates  of  the  collectivist  ownership  of  land.  Their 
doctrines  are,  in  fact,  founded  only  upon  mental  conceptions, 
or  rather  hallucinations. 


BOOK  II 


CHAPTER  I 

Industrial  collectivism.  Marx  and  Lassalle.  Definition  of  capital. 
"  Les  liens  sociaux."  Use  of  "  money."  Capital  not  the  result 
of  saving.    Lassalle's  explanation  of  origin  of  capital. 

So  far  our  criticism  has  been  confined  to  collectivism  as 
applicable  to  "  real "  property ;  it  will  now  be  considered 
in  relation  to  industry.  In  this  connection,  the  German 
writers,  Lassalle,  and  especially  Marx,  call  for  attention. 
Their  proposal,  subject  to  some  variations,  is  that  all  means 
of  production  should  be  acquired  by  the  state,  but  that 
private  ownership  of  objects  of  consumption  should  still  be 
permitted,  and  that  individuals  should  be  allowed  the  free 
determination  of  their  personal  requirements.  On  the 
constructive,  or  positive  side,  this  doctrine  has  many 
lacunae,  and  reveals  wide  differences  of  opinion  between 
these  authors ;  Schaffle  alone  amongst  collectivist  writers 
has  attempted  to  give  definition  and  consistency  to  this 
collection  of  ideas  and  aspirations. 

Before  examining  the  positive  measures  which  are 
proposed  by  collectivists,  we  must  refer  once  more  to  the 
negative  aspect  of  their  criticism,  on  which  side  their  ideas 
are  far  better  defined  and  more  fully  expressed.  The  two 
main  points  to  which  their  researches  and  arguments  are 
directed  are,  the  nature  and  origin  (i)  of  capital,  and  (2)  of 
industrial  gain.  The  first  of  these  is  the  subject  oi  Das 
Kapital,  by  Marx,  and  the  second  is  dealt  with  by  Lassalle, 
in  his  book  Herr  Bastiat,  Schulse  de  Delitzschy  der 
CEkonomische  Julian. 

It  is  asserted  that  economists  are  altogether  mistaken 
in  their  conception  of  the  nature  and  origin  of  "  capital " 


94        FALSE  CONCEPTIONS  OF  ECONOMISTS 

and  of  industrial  gain  ;  they  are  accused  of  having  con- 
structed an  abstract  and  conventional  system  of  political 
economy,  expressed  in  formulae  which  have  no  real 
existence  outside  the  minds  of  certain  thinkers,  and  which 
are  repugnant  both  to  historical  development  and  to  the 
existing  condition  of  society.  Political  economy,  they  say, 
treats  men  as  if  they  were  isolated  and  autonomous 
beings  responsible  for  the  economical  results  of  their  own 
acts.  Thus,  a  man  works  and  makes  a  profit ;  he  saves 
part  of  his  income  and  amasses  "capital" — that  is,  he 
creates  instruments  of  labour  and  stores  up  raw  material 
or  provisions;  in  co-operation  with  others  he  organises 
industry ;  he  speculates  ;  and,  being  wise  and  far-seeing,  he 
is  rewarded  by  success. 

Such,  they  say,  is  the  conception  of  economists ;  but 
according  to  Lassalle  and  Marx,  it  is  false  and  fantastic. 
Under  existing  conditions,  they  assert,  individuals  are  not 
economically  responsible  for  their  own  acts ;  one  man 
reaps  where  he  has  not  sown,  whilst  another  sows  but 
obtains  no  return ;  and  this  perversion  of  justice  is  not 
exceptional,  it  is  the  rule. 

The  condition  which  really  governs  the  economic  world 
is,  says  Lassalle,  "les  liens  sociaux,"  which  he  describes 
as  resembling  the  brute  forces  of  nature,  and  as  being 
agents  of  destiny,  who  make  sport  of  the  vaunted  freedom 
of  humanity,  and  deprive  it  of  liberty  and  moral  responsi- 
bility. Capital,  he  declares,  is  created  neither  by  labour 
nor  by  thrift,  but  by  "les  liens  sociaux."  Men  are 
tempted  to  speculate,  relying  upon  their  divination  of 
future  events ;  but  since  future  events  which  cannot, 
are  always  more  numerous  than  those  which  can,  be 
foreseen,  the  more  speculation  is  guided  by  calculation, 
the  greater  is  the  probability  of  failure.  It  is  also 
asserted  that  the  influence  of  external  and  uncontrollable 
circumstances  is  greater  or  less,  in  proportion  to  the  extent 
to  which  the  labour  of  individuals  is  employed  in  the  pro- 
duction of  "  values-in-exchange  " — that  is,  commodities  for 
the  use  of  others — or  of  "values-of-utility"  for  their  own 
consumption.    Socialists  attach  great  importance  to  the  fact 


FLUCTUATIONS  OF  TRADE  05 

that  the  production  of  "values-in-exchange,"  in  place  of 
"  utility-values,"  is  continually  increasing,  and  assert  that 
economists  are  far  from  appreciating  the  significance  of 
this  evolution. 

Thus  to  the  abstract  theories  of  economists,  the  German 
socialists  oppose  what  they  term  the  concrete  aspect  of  the 
world.  All  wealth,  they  say,  is  derived  from  "les  liens 
sociaux  " — that  is  to  say,  from  "  luck  " — but  wage  earners  are 
excluded  from  participating  in  the  game  of  speculation, 
since  they  have  no  capital  wherewith  to  provide  the 
necessary  stake.  ^ 

Lassalle  does  not  deny  that  in  certain  circumstances 
wages  may  increase,  but  he  says  that  this  increase  can 
only  be  temporary  and  of  insignificant  amount.  If  a  cycle 
of  trade  prosperity  lasts  but  a  short  time,  the  determined 
opposition  of  employers  to  any  increase  in  the  cost  of  labour 
has  to  be  encountered,  whilst  if  it  is  of  longer  duration, 
the  increase  of  population,  by  adding  to  the  supply  of 
labour,  soon  reduces  the  wage  rate  to  the  old  or  even  to  a 
lower  level.  ^  On  the  other  hand,  when  there  is  industrial 
depression,  the  effect  is  an  immediate  reduction  of  wages 
and  a  diminution  of  work,  which  falls  with  crushing  weight 
on  the  wage  earners  ;  thus  chance  and  the  violent  fluctua- 
tions of  the  market  destroy  all  liberty  of  work  and  all 
personal  economic  responsibility.  Lassalle  enunciates 
this  as  if  it  were  a  principle,  almost  an  axiom ;  he  then 
deals  with  the  definition  which  Schulze  de  Delitzsch  gives  of 
capital,  and  of  its  formation  : — One  man  produces  cloth, 
another  clothes,  another  grain,  and  each  one  exchanges  his 
surplus  product  with  others.  In  this  way,  says  Lassalle, 
political  economy  represents  men  as  being  autonomous 
producers ;  but  nothing  can  now  be  more  untrue.  The 
small  and  independent  producer  no  longer  exists  ;  no  one 
now  produces  what  he  himself  consumes.     This  used  to  be 

^  Ferdinand  Lassalle :  Herr  Bastiat,  Schulze  de  Delitzsch^ 
traduction  de  B.  Malon,  p.  51. 

'^  It  is  worthy  of  remark  that  all  socialists  are  disciples  of  Malthus, 
or  rather,  avail  themselves  of  his  theories  in  their  attacks  upon 
political  economy  and  modern  social  conditions. 


96     LASSALLE  AND  SCHULZE  DE  DELITZSCH 

the  case  in  the  middle  ages,  but  now  there  is  nothing  but 
socialised  work,  and  no  one  exchanges  his  surplus 
production  for  the  necessaries  of  life ;  on  the  contrary,  whilst 
the  distinctive  feature  of  labour  in  former  times  was 
that  production  was  mainly  for  personal  use,  and  only  the 
surplus  was  disposed  of,  the  distinctive  feature  of  modern 
labour  is  that  each  workman  produces  "values-in-exchange," 
which  he  cannot  use,  in  place  of  "  values-in-utility  "  for  his 
own  consumption.  It  is  this  which  is  the  origin  of  the 
vast  wealth  and  the  vast  property  of  the  present  day ; 
this  it  is  also  which  has  created  the  cosmopolitan  market, 
with  its  consequences,  surplus  population,  commercial 
crises,  stagnation  of  trade,  and  unemployment.  Lassalle 
accuses  Schulze  de  Delitzsch  of  failing  to  understand  what 
it  is  that  makes  the  position  of  the  labourer  so  wretched 
and  uncertain,  and  points  out  that  a  workman  who 
himself  produces  what  he  needs  cannot  be  thrown  so 
suddenly  into  misery  as  the  workman  who,  being  without 
the  means  of  resistance  afforded  by  the  possession  of 
capital,  is  wholly  at  the  mercy  of  the  fluctuations  of 
trade.  He  further  charges  Schulze  de  Delitzsch  with  entire 
ignorance  of  economical  conditions  and  of  the  real  origin 
of  capital.  He  says :  "  I  will  force  you  to  understand 
that  it  is  not  until  production  is  exclusively  directed  to 
*  values-in-exchange,'  and  labour  has  assumed  a  form 
and  nature  of  execution  under  which  each  one  produces 
nothing  but  commodities  which  are  of  no  use  to  him, — it  is 
only  then,  I  say,  that  '  capital,'  properly  so-called,  can  be 
said  to  exist."  1  The  definition  of  "capital"  given  by 
Schulze  de  Delitzsch,  well  known  as  the  chief  of  German 
co-operators,  which  appears  to  have  been  the  cause  of 
this  outburst,  is  as  follows  : — " '  Capital '  is  that  part  of 
produce  which  is  employed  for  ulterior  production." 
Political  economists  usually  define  it  more  briefly  as  being 
"  accumulated  labour,"  such,  for  instance,  as  machines,  raw 
material,  or  stores  of  means  of  subsistence. 

Lassalle  ingeniously  asks  whether  (admitting  capital 
to  be  accumulated  labour)  the  person  who  does  the  work 
*  Lassalle,  op.  cit.,  87. 


CAPITAL  NOT  THE  RESULT  OF  THRIFT     97 

secures  the  accumulation,  or  whether  "capital  is  not  in 
reality  the  accumulation  by  one  individual  of  the  labour  of 
others,"  Most  economists  say  that  "  capital "  is  the  result 
of  thrift,  or  abstention  from  consumption.  This  statement 
is  vigorously  attacked  by  Lassalle.^  He  denies  that 
abstinence  is  the  parent  of  capital,  and  repeats  that  its  real 
origin  is  "  luck,"  and  by  way  of  illustration  refers  to  the 
fluctuation  of  prices  on  the  stock  exchange,  and  in  the 
value  of  real  estate.  He  takes  an  imaginary  case  of  a 
person  who  has  invested  in  railway  shares  at  par,  and,  after 
having  received  high  dividends  on  his  investments  for 
some  years,  sells  his  shares,  which  in  the  meantime  have 
risen  in  value,  and  secures  a  large  addition  to  his  capital, 
and  points  out  that  this  addition  was  due  to  the  increase 
of  passengers  and  goods  traffic  and  the  diminished  cost  of 
working,  and  was  in  no  way  attributable  to  thrift,  but  to 
"  luck."  This  is  an  example  of  "  unearned  increment," 
the  doctrine  so  much  discussed  by  English  writers. 

Increase  in  the  value  of  real  property,  Lassalle  declares, 
may  be  similarly  explained,  and  illustrates  this  by  suppos- 
ing a  man  to  have  bought  an  estate  for  100,000  thalers, 
from  which  he  receives  an  annual  income  of  4,000  thalers ; 
being  careless  or  extravagant,  he  exceeds  his  income,  and 
at  the  end  of  ten  years  is  in  debt  to  the  amount  of 
20,000  thalers ;  he  then  sells  his  property,  and  owing  to 
the  increase  of  population  and  to  the  rise  in  the 
price  of  wheat  during  this  period,  the  value  of  his 
estate  has  doubled,  and  he  receives  200,000  thalers  for 
the  land  for  which  he  paid  100,000.  Thus,  after  paying 
his  debt  of  20,000  thalers,  his  capital  is  increased  by 
80,000  thalers.  This  increase  of  capital  might,  says 
Lassalle,  be  attributable  to  a  variety  of  causes,  always 
excepting  labour  or  thrift  on  the  part  of  the  proprietor, 
but  the  predominant  cause  is  "  luck." 

No  doubt  "  luck  "  may  increase  individual  wealth,  but 

it   may  also   diminish  it.     It   is  as  easy  to  find  landed 

proprietors  who  have  suffered  from  bad  "  luck  "  as  it  is  to 

find  those  who  have  been  enriched  by  good  "  luck."     It  is 

1  Lassalle,  op.  ctt.,  p.  121. 

G 


98  DUE  TO  "LUCK" 

the  same  with  commerce ;  here  also  "  luck  "  is  as  often  the 
cause  of  loss  as  of  gain.     There  are  periods  when  the 
chances  are  generally  favourable  to  capitalists  as  a  whole ; 
these  seasons  of  prosperity  are  usually  characterised  by  an 
outbreak  of  speculation,  and  are  followed,  almost  invariably 
by   periods   of    depression,   when   "  luck "   is   adverse   to 
landed  proprietors  as  well  as  to  merchants  and  capitalists : 
the  ancient  apologue  of  the  lean  and  fat  kine  is  evidence 
of  the  antiquity  of  this  experience.     The  meaning  given 
to  the  word  "  capital "  is  an  unnatural  one  :  "  luck  "  cannot, 
in  any  true  sense  of  the  word,  be  said  to  create  "  capital," 
although  it  may  add  to  its  utility.      However  much  the 
value   of    the   railway   shares   referred    to   above    might 
fluctuate,  the  social  capital — that  is,  the  permanent  way,  the 
stations,  and  the  plant — would  remain  unchanged,  except  in 
so  far  as  advantage  might  be  taken  of  prosperous  seasons 
to  add  to  them,  but  such  additions  would  not  be  due  to 
"  luck,"  but  to  labour  and  thrift.     Lassalle's  procedure  is 
polemical  rather  than  scientific,  and  he  treats  exceptional 
cases  as  if  they  were  the  rule  and  were  capable  of  general 
application.     His  assertion  that,  as  a  consequence  of  the 
dominating    influence    of   external    social   circumstances, 
every  man  is  saddled  with  responsibility  for  actions  in 
which  he   has  had  no  share,  is  true  in  a  certain  number 
of  cases,  but  is  false  as  a  general  statement ;  it  would  be 
equally  true  to  assert  that  because  some  men  are  born,  or 
become  lame,  it  is  the  destiny  of  all  men  to  be  cripples ;  or 
that   because   men   of  all   conditions   fall   victims   to  an 
epidemic,  a  good  constitution  and  temperate  habits  have 
no  influence  upon  length  of  life.      Intelligent,  far-seeing, 
men  know  how  to  protect  themselves  from  the  influence  of 
"  luck  "  when  it  is  adverse,  and  how  to  derive  advantage 
from  it  when  it  is  favourable.     To  liken  laborious,  thrifty, 
far-seeing  men  to  the  idle,  the  extravagant,  and  the  obtuse, 
and  to  assert  that  the  inequality  in  their  position  is  attribut- 
able solely  to  "  luck,"  is  repugnant  to  common  sense.     The 
idea    that    "  luck "   is    the   supreme    influence    in   social 
relations,  is  in  itself  a  sufficient  condemnation  of  Lassalle's 
theory. 


"LUCK"  AN  INCENTIVE  TO  ENTERPRISE    99 

In  contrast  to  the  economical  position  of  workmen 
who  produce  only  for  their  own  needs,  Lassalle  describes 
the  existing  system  under  which  nearly  everyone  is 
employed  in  the  production  of  commodities  intended  for 
exchange,  and  draws  the  inference  that  under  this  system 
men  must  be  dominated  by  circumstances  external  to 
themselves ;  but  the  instances  that  he  adduces  in  support 
of  this  inference  are  exceptional,  since  the  origin  of 
private  wealth  is  but  rarely  attributable  to  circumstances 
altogether  unconnected  with  the  labour  and  intelligence  of 
its  possessor ;  he  fails  also  to  recognise  that  circumstances 
may  be  unfavourable  as  well  as  favourable,  and  although 
external  circumstances  may  be  disturbing,  yet  even  so 
their  influence  is  on  the  whole  beneficial ;  they  may  occur 
suddenly  and  unexpectedly,  but  they  can  generally  be 
foreseen,  even  if  dimly,  and  provided  against  by  an 
acute  and  vigilant  man.  Far  from  being  a  source  of 
discouragement,  the  indistinct  but  golden  chances  of 
the  future  act  as  a  strong  incentive  to  enterprising 
spirits,  and  are  the  cause  of  most  of  the  great  under- 
takings by  which  mankind  has  benefited.  In  this  sense 
it  is  true  that  "  luck  "  has  largely  influenced  and  assisted 
the  progress  of  humanity. 

The  German  socialists  assert  that  "capital"  and  "profit" 
are  phenomena  which  have  not  always  existed.  Accord- 
ing to  Lassalle,  "profit"  requires  the  present  social 
institutions  with  their  implicated  ideas  of  "values-in- 
exchange,"  "capital,"  "circulation  of  money,"  "competition," 
"private  enterprise,"  "wage-paid  labour,"  and  the  universal 
acceptance  of  tokens  of  exchange,  or  money,  for  com- 
modities of  every  description,  and  asserts  that  to  make  the 
idea  of  "profit"  comprehensible,  all  these  conceptions 
must  be  taken  into  account. 

But  Robinson  Crusoe,  alone  upon  his  island,  made  a 
profit  whenever,  learning  by  experience,  he  obtained  an 
equally  successful  result  with  a  smaller  expenditure  of 
labour,  or  a  better  result  with  an  equal  expenditure : 
when  his  labour  was  altogether  unproductive,  as  in  the 
case  of  his  first  attempt  at  boat-building,  he  was  then  in  a 


100  MONEY  AND  PROFIT 

position  precisely  analogous  to  that  of  a  manufacturer  who 
has  produced  an  article  that  no  one  will  buy. 

Socialists  are  mistaken  when  they  assert  that  without 
"  money  "  there  can  be  no  profit ;  or  that  money  effects  a 
radical  change  in  economic  conditions,  and  in  the  character 
of  commercial  transactions.  Money  extends  and  regulates 
the  phenomena  of  production  and  exchange,  but  does  not 
alter  their  character,  and  economic  law  is  as  true  in  the 
case  of  an  isolated  individual  as  in  that  of  a  great 
community. 

Having  himself  arrived  at  the  conclusion  that  "  profit " 
is  a  novel  and  merely  accidental  economic  phenomenon, 
the  importance  attached  to  it  by  economists  appears  to 
Lassalle  to  be  almost  superstitious.  But  the  importance  of 
"  profit "  is  recognised,  not  by  economists  only,  but  by  all 
mankind,  the  reason  being  that  for  every  description  of 
human  industry,  commercial  or  agricultural,  no  other  test 
of  success  but  "  profit "  ever  has  or  ever  will  be  discovered. 

"  Profit "  alone  can  decide  whether  the  work  of  pro- 
duction has  been  well  contrived  and  conducted,  and 
provides  the  only  real  test  of  the  quality  and  of  the 
sufficiency  of  the  product.  It  is  by  the  absence  of 
"  profit  "  that  over  -  production  (wrongly  asserted  by 
Lassalle  to  be  an  inevitable  incident  of  modern  production) 
is  discovered  and  checked.  "  Profit,"  in  fact,  regulates  and 
controls  all  socialised  labour.  When  profit  is  ignored,  as 
it  often  is  by  the  state  in  the  administration  of  public 
services,  or  by  philanthropic  associations,  there  is  generally 
a  great  lack  of  efficiency.  This  does  not  imply  any 
condemnation  of  the  human  effort  that  is  inspired  by 
charity  and  disregards  all  thought  of  profit ;  but  in  regular 
and  normal  economic  operations,  "profit"  must  always 
hold  the  most  important  place. 

It  is  an  error,  says  Lassalle,  made  by  all  "  bourgeois  " 
economists,  to  consider  capital  and  the  other  economical 
categories  as  being  logically  and  eternally  true.  They 
are,  he  declares,  not  logical,  but  historical  categories: 
the  productivity  of  capital  is  not  a  law  of  nature,  but  the 
result  of  certain  definite   conditions,  and  if  these  were 


THE  DIVISION  OF  LABOUR  101 

changed  it  might  and  ought  to  disappear.  In  support  of 
this  curious  statement,  he  gives  the  following  illustration  : — 
*'  In  the  primitive  conditions  of  individual  and  isolated 
labour  from  which  we  started,  an  instrument  of  work,  such 
as  the  bow  of  the  Indian,  was  productive  only  in  the  hands 
of  the  user,  and  therefore  it  was  the  use  of  it  that  was 
productive."  But  the  Indian  might  lend  his  bow  to 
another  and  stipulate  for  a  share  of  the  game  obtained  by 
its  use  as  payment  for  the  loan  ;  in  fact,  common  sense 
tells  us  that  in  all  stages  of  civilisation,  such  an  arrange- 
ment would  be  natural.  "  Capital "  in  the  form  of  instru- 
ments adds  to  the  productive  power  of  labour,  and  it  is  a 
matter  of  small  importance,  so  far  as  regards  production, 
whether  the  person  using  "  capital "  is  its  creator,  its 
possessor,  or  merely  a  borrower. 

Since  "  capital "  did  not  always  exist,  how  did  it 
originate  ?  It  is  ingeniously  suggested  that  the  origin  of 
"  capital "  was  the  "  division  of  labour  " :  "  this,"  says  Lassalle, 
"  is  the  source  of  all  wealth.^  The  law  that  productivity 
is  increased  and  commodities  made  cheaper  by  this 
cause — a  law  which  is  based  upon  the  nature  of  labour — is  the 
only  economical  law  which  can  properly  be  said  to  be  a 
natural  law.  Nevertheless,  it  is  not  a  law  of  nature,  since 
it  does  not  belong  to  the  domain  of  nature,  but  to  that  of 
mind  ;  at  the  same  time,  it  is  invested  with  the  same 
character  of  "  necessity "  as  are  the  laws  of  electricity, 
gravitation,  the  elasticity  of  steam,  etc.  It  is  a  natural 
social  law,  and  in  all  nations  a  few  individuals  have 
appropriated  this  natural  social  law,  which  owes  its  exist- 
ence to  collective  mentality,  to  their  exclusive  advantage, 
leaving  for  the  rest  of  the  peoples,  stupefied,  indigent,  and 
strangled  by  invisible  bonds,  only  such  portion  of  the 
constantly  increasing  and  accumulating  product  of  their 
toil  as,  even  before  the  dawn  of  civilisation,  the  Indian 
could,  under  favourable  conditions,  gain  for  himself — that  is 
to  say,  a  bare  subsistence.       It  is  as  if  some  individuals 

*  He  ought  rather  to  say,  one  of  the  principal  sources,  since 
without "  capital " — that  is,  without  the  instruments  of  work — division  of 
labour  would  lose  the  largest  part  of  its  productivity. 


102  "PLUS -VALUE" 

were  to  claim  gravitation,  the  elasticity  of  steam,  or  the 
heat  of  the  sun  as  their  exclusive  property  !  Such  people 
provide  sustenance  for  their  labourers  as  they  do  heat  and 
oil  for  their  engines,  in  order  to  maintain  them  in  good 
working  order,  and  look  upon  the  maintenance  of  their 
workmen  merely  as  a  necessary  part  of  the  cost  of 
production."  ^ 

Marx  propounds  a  similar  idea  when  he  says  that  the 
capitalists  have  captured  science  and  used  it  for  their  own 
advantage. 

The  world  is  said  to  be  the  victim  of  an  unnatural  and 
sinister  inconsistency.  The  vast  production  of  modern 
society  is  communal  and  co-operative ;  yet  the  distri- 
bution of  the  products  is  not  communal  but  individualistic. 
Co-operative  labour  yields  a  surplus  in  excess  of  what 
could  be  produced  by  isolated  labour,  and  this  surplus, 
which  in  justice  belongs  to  all,  is  entirely  appropriated  by 
the  capitalists. 

If  this  were  true,  all,  or  at  any  rate  the  majority  of 
workmen's  co-operative  societies  ought  to  prosper;  but 
experience  shows  that  most  of  these  societies,  even  when 
assisted  by  loans,  either  gratuitous,  or  at  a  low  rate  of 
interest,  are  unsuccessful,  or  remain  in  a  condition  of 
stagnation.  Again,  in  most  civilised  countries,  there  are 
many  small  employers  and  independent  workmen ;  but 
they  are  no  better  ofif  than  the  capable  and  industrious 
men  who  exchange  their  labour  for  wages.  And  lastly,  there 
is  the  fact,  fatal  to  Lassalle's  theory,  that  large  numbers  of 
great  merchants  and  well-established  companies,  not  only 
fail  to  secure  any  profit,  but  suffer  losses,  and  are  compelled 
to  go  into  liquidation.  This  is  sufficient  proof  that  the 
so-called  "  plus-value,"  which  is  asserted  to  be  the  natural 
and  necessary  result  of  the  division  of  labour,  and  of  which 
the  employers  are  said  to  have  the  exclusive  benefit, 
either  has  no  necessary  existence  or  is  insignificant  in 
amount,  or  must  be  of  advantage  to  others  besides  the 
employers. 

To  return  to  Lassalle's  principal  contention :  he  declares 
J  Lassalle,  Capital  and  Labour^  p.  249. 


CAPITAL  IS  ACCUMULATED  LABOUR       103 

that  capital  is  not  the  result  of  saving,  and  he  brings 
forward  many  arguments  and  so-called  facts  to  prove  the 
falsity  of  this  economic  theory.  As  regards  wage  earners, 
he  declares  that  the  labour  of  the  vast  majority  of  work- 
men only  suffices  to  supply  their  daily  needs,  and  that  it  is 
therefore  impossible  for  them  to  exercise  thrift.  The  ten 
millions  of  depositors  in  French  savings  banks  provide  a 
sufficiently  striking  proof  of  the  inaccuracy  of  this  state- 
ment.^ However  low  wages  may  be,  it  is  clear  that  there 
is  a  large  number  of  manual  labourers  who  are  able  to 
save,  and  that  thrift  is  practicable  even  in  the  lowest  ranks 
of  society.  From  other  points  of  view  Lassalle's  state- 
ment is  open  to  criticism.  He  admits  that  the  definition 
of  "  capital "  as  being  "  accumulated  labour  "  is  apparently 
correct,  but  declares  that  the  labour  accumulated  is  not 
the  property  of  the  employer,  and  that  in  justice  it  belongs 
to  others  ;  profit,  he  says,  is  labour  which  has  not  been 
paid  for,  and  he  asserts  that  there  is  a  wide  difference 
between  the  value  of  the  work  done  and  the  wages  paid 
for  it — values  which  the  public  imagine  to  be  equivalent. 
Lassalle  is  indignant  that  "  non-consumption  "  or  "  saving," 
which  is  a  merely  negative  quality,  should  be  said  to  be 
the  source  of  capital.  Savings,  however,  do,  as  a  fact,  exist, 
and  if  not  transformed  into  "capital,"  what  rdle  do  they 
fulfil? 

It  has  been  said  that  to  save  is  to  create ;  and  under 
certain  conditions,  the  truth  of  this  is  obvious,  as  in  the 
case  of  some  commodity  which  is  being  constantly  pro- 
duced. Here  any  saving  \s,pro  tanto^  an  addition  to  the 
quantity  available  for  use ;  thus,  if  a  man  possesses  a  ton 
of  coal,  and  by  economy  in  the  use  of  it  he  saves  half,  he 
thereby  adds  this  quantity  to  the  general  stock ;  and  the 
effect  of  his  non-consumption  or  saving  in  this  case  may 
obviously  be  a  source  of  capital ;  or  if,  possessing  a  stock 

^  The  amount  due  to  depositors  in  private  as  well  as  national 
savings  banks  was,  on  31st  December  1900,  4,274,000,00c  fr.,  as 
against  1,802,809  fr.  in  1882,  whilst  the  number  of  depositors  during 
the  same  period  had  increased  from  4,645,893  to  10,680,866. — 
{Bulletin  de  statistique  de  Mai  1902,  p.  558.) 


104  PROGRESS  DUE  TO  INDIVIDUALS 

of  provisions,  a  man  uses  them  with  economy,  and  sets 
aside  a  portion  for  subsistence  whilst  carrying  out  a  work 
of  some  duration  :  in  this  case,  again,  his  saving  is  clearly 
a  source  of  capital.  These  are  merely  simple  instances  of 
a  principle  which,  in  a  more  complex  form,  is  a  common 
origin  of  capital.  Lassalle  makes  the  further  assertion 
that  progress  has  always  been  due  to  the  community,  and 
not  to  the  individual.  No  educated  person  would  deny 
the  existence  and  the  advantage  of  co-operation  between 
the  individual  and  the  community  of  which  he  is  a 
member ;  but  the  part  played  by  the  individual  is  far  more 
important  than  Lassalle  admits.  During  the  infancy  of 
humanity  it  is  possible  that  social  action  might  have  been 
the  predominant  cause  of  progress — although  we  remember 
that  the  names  of  Prometheus  and  Triptolemus  show  that 
antiquity  attributed  to  individuals  the  invention  of  the 
technical  arts ;  but  in  the  modern  world  it  is  hardly 
possible  to  name  any  discovery  which  is  not  due  to  an 
individual.  History  abounds  with  the  names  of  inventors, 
and  from  Gutenburg  and  Christopher  Columbus  down  to 
Papin,  Watt,  Arkwright,  Jacquart,  Bessemer,  and  Lesseps, 
all  the  great  achievements  of  humanity  are  associated 
with  individuals. 

Lassalle  declares  that  it  is  absurd  to  suppose  that 
capital,  which  consists  for  the  most  part  of  things  that  are 
not  objects  of  consumption,  such  as  improvements  of  land, 
houses,  bars  of  iron,  etc.,  etc.,  can  be  created  by  abstinence 
from  consumption.  The  impossibility  is,  however,  only 
apparent,  and  through  the  agency  of  money,  the  capitali- 
sation of  savings  is  made  easy.  Thus,  the  coal  or  the 
provisions  economised  as  described  above,  might  have 
been  exchanged  for  money,  and  thus  have  been  converted 
from  perishable  into  permanent  capital.  This  truth  is  of 
general  application,  and  it  is  obvious  that  wealth  in  all  its 
forms  may  originate  in  saving.  Thrift  or  saving  in  its 
primitive  form  of  "  hoarding  "  may  no  doubt  be  considered 
in  an  economic  sense  as  being  a  negative  or  passive 
element;  but  when  capitalised,  it  at  once  becomes  an 
active  agent  in  modern  economy ;  and  savings  are  now 


"THRIFT'*  105 

daily  brought  into  the  market  and  transformed  into  some 
durable  form  of  capital,  usually  by  investments  in  the 
shares  of  joint  stock  companies.  Thrift  imparts  a  new 
direction  to  the  industry  of  a  country;  in  place  of  the 
employment  of  labour  upon  immediately  consumable 
commodities,  it  promotes  the  creation  of  means  of  pro- 
duction and  works  of  permanent  value.  For  example, 
suppose  that  two  men  have  each  an  income  of  ;^4000,  and 
that  one  spends  the  whole  in  luxurious  living,  whilst  the 
other  saves  half  his  income  and  spends  it  on  the  permanent 
improvement  of  his  property,  or  invests  it  in  the  shares 
of  some  industrial  company :  in  this  way  his  savings  are 
capitalised,  and  assist  in  the  creation  of  durable  and 
productive  utilities.  Thus,  the  part  of  thrift  in  modern  life 
is  to  discourage  excessive  production  of  articles  of  luxury, 
which  are  for  the  most  part  perishable,  and  to  encourage 
the  employment  of  labour  on  durable  objects  and  means 
of  ulterior  production.  It  is  evident  that  the  wealth  of  a 
nation  will  increase  if  its  inhabitants  generally  follow  the 
example  of  the  latter  of  these  two  proprietors,  whereas 
in  the  contrary  case  its  capital  would  quickly  vanish. 
Lassalle,  blinded  by  his  prepossessions,  failed  to  perceive 
this  truth,  and  ignored  the  fact  that  although  capitalisation, 
or  the  conversion  of  savings  into  capital,  has  become  far 
more  easy  and  rapid  than  formerly,  the  change  is  one  of 
degree  only,  and  not  of  kind. 

Having  pointed  out  that  "accumulation"  or  "thrift" 
could  have  no  share  in  the  creation  of  "  capital,"  it  became 
necessary  for  Lassalle  to  find  some  other  origin  for  it, 
and  this,  as  has  been  already  mentioned,  he  found  in  the 
"  division  of  labour ; "  but,  he  says,  this  system  of  pro- 
duction, by  which  alone  a  surplus  in  excess  of  daily 
necessities  can  be  secured,  requires  a  pre-existing 
accumulation  of  capital  and  an  anterior  system  of  division 
of  labour  to  create  it ;  without  the  institution  of  slavery,  he 
asserts,  this  would  have  been  impossible.  Nations,  there- 
fore, which  started  with  a  system  of  complete  individual 
liberty,  such  as  the  Indian  hunting  tribes,  could  never 
accumulate  capital,  and  as  a  consequence  could  never  reach 


106  SLAVERY  AND  THE  DIVISION  OF  LABOUR 

any  high  degree  of  civilisation,  and  saving  would  have  been 
impossible  for  the  individual  workman.^  There  is  an 
obvious  contradiction  here :  if  division  of  labour  pre- 
supposes the  previous  existence  of  a  similar  system,  such 
a  system  must  have  been  in  force  ever  since  society  came 
into  being,  or  its  existence  at  any  given  time  would  be 
almost  inconceivable.  It  is  probable  that  the  division  of 
labour  and  co-operation  were  actually  evolved  from 
individual  and  isolated  labour ;  but  if  so,  saving  must 
always  have  been  possible  for  the  individual.  Lassalle, 
however,  refuses  to  recognise  any  other  origin  for  the 
division  and  combination  of  labour  but  slavery,  and 
roundly  asserts  that  it  must  therefore  have  been  for  the 
benefit  of  nations  that  slavery  should  have  been  associated 
with  their  genesis.  By  way  of  illustration,  he  supposes 
that  a  master  who  possessed  a  hundred  slaves,  employed 
thirty  of  them  in  providing  for  his  personal  requirements 
of  all  kinds,  sixty  in  agriculture,  and  the  remaining  ten  in 
the  manufacture  of  implements  for  the  use  of  the  other 
ninety.  Such  a  division  of  labour  would,  of  course,  be  far 
more  advantageous  than  if  all  the  work  required  were 
done  by  the  whole  hundred  working  together.  This, 
according  to  Lassalle,  was  the  origin  both  of  the  "  division 
of  labour  "  and  of  "  capital."  As  time  went  on,  the  master 
would  still  further  improve  the  system,  and,  at  each  stage 
of  the  progress,  would  gain  by  the  increase  of  productivity. 
"  You  see,  then,  M.  Schulze,"  says  Lassalle,  "  that  what  this 
master  has  done  is  not  to  abstain  from  consumption,  but 
to  alter  continually  the  administration  of  production,  by 
introducing  division  of  labour,  and  by  constantly  increasing 
the  diversion  of  labour  from  the  direct  to  the  indirect  pro- 
duction of  means  of  luxury  and  subsistence — that  is,  to  the 
manufacture  of  implements  and  machines — in  a  word,  to  the 
creation  of  fixed  capital  of  all  kinds — and  the  more  he  does 
this,  to  which  you  give  the  name  of  '  thrift,'  the  more  his 
wealth  is  increased." 

This  theory  is  arguable  both  from  the  doctrinal  or  the 
historical  point  of  view.     Nations  in  which  slavery  never 
*  Lassalle,  op.  cit,  p.  113. 


CAPITALISM  IN  THE  MIDDLE  AGES        107 

existed  or  which  soon  abandoned  it — the  Grermans,  for 
example — were  not  thereby  retarded  in  arriving  at  the 
division  of  labour  and  the  creation  of  capital.  When 
slavery  or  even  when  serfdom  was  suppressed  in  Europe, 
the  system  of  division  of  labour  did  not  cease  to  spread, 
and  in  those  colonies  in  which  it  has  been  longest  in 
existence,  slavery  has  always  been  considered  to  have  been 
a  great  obstacle  both  to  the  division  of  labour  and  to  the 
employment  of  machinery. 

Socialists,  however,  have  made  up  their  minds  that  the 
division  and  association  of  labour  is  the  only  source  of 
wealth,  and  they  will  not  admit  that  thrift  or  enterprise 
can  have  any  share  in  its  creation  ;  but  it  is  not  difficult  to 
show  that  the  advantage  arising  from  the  general  adoption 
of  a  system  of  associated  labour  falls  in  reality  not  to  the 
employers  but  to  the  community  in  general  in  the  shape  of 
a  diminution  in  the  cost  of  commodities. 

In  pursuit  of  his  historical  demonstration,  Lassalle 
comes  across  some  truths  upon  which  he  lays  much  stress, 
but  which  in  no  way  support  his  thesis.  The  incessant 
and  automatically  increasing  productivity  of  capital,  he 
points  out,  was  impossible  in  ancient  communities,  when 
domestic  production  predominated,  and  when  each  worker 
or  little  group  of  workers,  produced  commodities  for  their 
own  consumption  only,  and  adds  that  this  was  almost 
equally  true  during  the  middle  ages.  How,  he  asks, 
could  capitalisation  have  been  possible  at  that  time? 
Could  a  proprietor  have  improved  his  position  by  the 
cultivation  of  wheat  in  place  of  rye  ?  No,  since  his  land 
was  subject  to  tithe  payable  in  rye.  Could  a  merchant,  by 
means  of  thrift,  extend  and  improve  his  industrial  position  ? 
No,  because  in  addition  to  the  limitation  of  his  market, 
owing  to  the  absence  of  means  of  communication,  both 
the  method  of  his  production  and  the  number  of  his  work- 
men and  apprentices  were  regulated  by  inviolable  laws. 
The  investment  of  capital  in  another  person's  business  was 
also  impracticable,  owing  to  the  rarity  of  opportunity  and 
the  lawlessness  of  the  times. 

These  observations,  although  true,  do  not  prove  capital 


108  INDUSTRIAL  LIBERTY  AND  CAPITALISATION 

to  be  a  novel  and  accidental  element  in  economics ;  they 
merely  show  that  in  ancient  times  and  during  the  middle 
ages  capitalisation  was  less  easy  than  at  the  present  time, 
since  it  was  hampered  by  laws  and  regulations  as  well  as 
by  customs  and  prejudices.  If  now,  to  the  great  detriment 
of  civilisation,  socialistic  doctrines  should  prevail,  the 
process  of  capitalisation  might  again  become  as  difficult  as 
it  was  formerly,  since  it  requires  the  fullest  industrial  and 
professional  liberty  for  its  successful  development,  and  if 
this  liberty  were  suppressed  or  harassed  by  regulations, 
capitalisation,  although  it  would  not  altogether  disappear, 
would  be  greatly  restricted,  and  profitable  thrift  would,  to  a 
great  extent,  be  replaced  by  the  primitive  and  sterile  form 
of  saving  known  as  hoarding. 


CHAPTER    II 

Capital  itself  is  unproductive.  Definition  of  "profit"  or  "plus- 
value."  Marx'  theory  of  "  plus  -  value,"  and  his  explanation  of 
the  origin  of  capital.  "Constant"  and  "variable"  capital. 
"Values-in-exchange"  and  "values-in-utility."  Labour-force 
and  its  value.  Iron  law  of  Lassalle.  Claim  of  capital  to 
interest. 

Having  shown  that  capital  is  created  by  the  capitalisation 
of  savings,  the  question  arises  whether  it  has  any  other 
source,  and  also  whether  this  saving,  the  parent  of  capital, 
is,  as  has  been  asserted,  the  profit  derived  by  the  capitalist 
from  the  unjust  appropriation  of  part  of  the  product  of 
labour  ;  if  this  were  so,  then,  whatever  its  advantages,  the 
practice  of  saving  would  forfeit  all  claim  to  respect.  This 
profit,  however,  is  not  the  only  source  from  which  saving 
is  derived.  It  is  often  part  of  their  wages  or  earnings 
set  aside  by  workmen,  or  small  peasant  proprietors, 
or  by  the  professional  men,  out  of  their  income.  The 
statement  is  therefore  an  exaggerated  one ;  it  is  only  a 
part,  possibly  the  larger  part,  of  saving,  which  is  derived 
from  the  profit  said  to  be  filched  from  the  labourer's  wages. 
The  contention  that  a  part  of  the  recompense  due  to  the 
workman  for  his  labour  is  unjustly  retained  by  his 
employer,  is  in  reality  the  kernel  of  the  collectivist 
doctrine. 

According  to  collectivists,  capital  is  in  itself  unpro- 
ductive, and  is  therefore  only  entitled  to  demand  for  its 
use  an  amount  sufficient  to  maintain  and  replace  it;  it 
may  have  a  claim  to  redemption,  but  not  to  interest,  still 
less  to  profit.  This  idea,  pedantically  expounded  by 
Marx,  was  explained   by   a  public  speaker,   Briosne,  to 

109 


110         CAPITAL  NO  CLAIM  TO  INTEREST 

mean  that  the  owner  of  a  house,  so  far  from  receiving  any 
rent  for  the  use  of  it,  ought  to  recompense  the  tenant  who 
maintains  his  property  in  good  condition.  Without 
going  quite  so  far  as  this,  collectivists  in  general  assert 
that  the  owner  of  a  house  and  his  tenant  are  quits  if  the 
latter  bears  the  cost  of  upkeep.  This  principle,  they  assert, 
is  equally  applicable  to  machinery  and  to  factories ;  the 
manufacturer  has  no  just  claim  to  interest  or  profit ;  the 
establishment  of  a  sinking  fund,  and  the  maintenance  of 
his  property  in  good  condition,  is  the  utmost  that  he  can 
reasonably  demand. 

In  order  to  form  an  opinion  upon  the  justice  of  this 
view,  a  definition  of  profit  is  essential.  In  an  economical 
sense,  this  word  has  various  significations :  it  denotes  the 
legitimate  remuneration  of  the  creator  of  capital,  the 
salaries  of  men  who  devote  themselves  to  the  business  of 
management ;  it  includes  the  recompense  for  risks  under- 
taken, and,  lastly,  and  perhaps  most  important  of  all,  it  is 
the  reward  of  the  discoverer  of  improvements  in  the 
organisation  of  labour,  and  of  the  inventor  of  new  and  more 
efficient  combinations  of  industry  and  commerce.  Interest 
has  a  very  different  signification  :  it  is  a  stipulated  amount 
paid  for  the  use  of  capital ;  it  is  more  constant,  and  less 
subject  to  fluctuations  than  profit^  These  definitions  are 
clear,  and  appear  to  be  in  harmony  with  the  nature  of 
things  ;  collectivists,  however,  dispute  their  correctness,  or, 
rather,  ignore  them  altogether.  In  their  eyes,  profit  is 
simply  that  portion  of  the  product  of  labour  which  is 
unjustly  appropriated  by  capitalists,  and  nothing  else  ;  and 
they  support  this  assertion  by  arguments  which  they  say 
are  based  upon  fact  as  well  as  theory.  The  modern 
workman,  they  say,  is  subjected  both  to  a  "  dime  "  or  tax, 
and  to  the  "  corvee  "  or  forced  labour.  The  dime,  according 
to  coUectivist  writers,  was,  under  the  feudal  system,  a  tax 
upon  the  labourer  for  the  benefit  of  his  lord,  or  of  the 
church,  amounting  to  a  tenth  part  of  the  produce  of  his 
labour,  and  the  corvee  was  compulsory  and  unpaid  work 

^  See  Essai  sur  la  repartition  des  richesses,  P.  Leroy  Beaulieu, 
chap.  viil. 


THE  «  CORVEE  ^'  IN  MODERN  INDUSTRY     111 

for  from  one  to  three  days  a  week.  By  the  combined 
imposition  of  these  exactions,  it  is  asserted  that  a  propor- 
tion varying  from  a  fifth  to  a  half  of  his  actual  production 
was  extorted  from  the  labourer.  Many  collectivist  writers 
do  not  hesitate  to  affirm  that  these  mediaeval  conditions, 
barbarous  as  they  seem  to  be,  were  mild  in  comparison 
with  those  involved  by  the  system  of  social  organisation 
now  in  force,  in  what  is  called  civilised  society.  They 
declare  that  at  the  present  day  the  value  of  the  work  for 
which  a  labourer  receives  no  pay  almost  always  exceeds 
that  for  which  he  is  paid.  An  attempt  to  prove  this 
statement  by  means  of  statistics  was  made  by  the  journal 
L^galite.  It  is  there  stated  that  the  corvee  in  modern 
French  industry  absorbs  on  the  average  six  hours  six 
minutes  out  of  twelve  hours'  work,  or  more  than  the  old 
dimes  and  corv^es  together,  and  that  some  indus- 
tries show  an  even  larger  proportion  of  unpaid  labour, 
culminating  in  the  lighting  industry,  in  which  one 
hour  and  twenty  minutes  only,  out  of  twelve  hours,  is 
paid  for. 

If  these  figures  are  correct,  it  is  evident  that  our  social 
system  is  extremely  oppressive,  and  that  the  rule  of  the 
modern  capitalist  is  far  more  rigorous  than  that  of  the 
feudal  proprietors.  The  calculations  upon  which  these 
assertions  are  founded  are,  however,  open  to  question.  It 
is  stated  that  they  are  mathematically  deducible  from  the 
results  of  industrial  enquiries  ;  but  if  they  were  literally  true, 
how  would  it  be  possible  to  obtain  workmen  for  industries 
in  which  conditions  are  so  oppressive,  and  why  is  it  that 
all  employers  have  not  engaged  in  those  industries  in 
which  the  cost  of  labour  represents  so  small  a  portion  of 
the  value  of  the  product  ?  Would  not  the  keen  competi- 
tion, of  which  socialists  speak  so  much,  have  equalised,  or 
at  any  rate  modified,  these  conditions  ?  Apart  from  those 
industries  which  are  monopolies,  such  as  that  of  lighting, 
why  should  the  corv6e  be  from  three  to  four  times  larger 
in  one  industry  than  in  another?  These  questions  are 
difficult  to  answer,  and  are  met  by  a  declaration  that  the 
facts  must  be  as  stated,  since  the  figures  quoted  are  not 


112      INDUSTRIAL  PRODUCTION  IN  FRANCE 

only  official,  but  have  been  collected  by  order  of  the 
"  bourgeoisie  "  itself. 

According  to  L&galit^^  these  enquiries  show  that 
the  value  of  the  annual  industrial  production  in  France 
amounts  to  7  milliards  130  million  francs.  Of  this  vast 
sum,  4  milliards  941  millions  represent  raw  material,  191 
millions  the  cost  of  fuel,  and  the  "  plus-value  "  due  to  labour 
amounts  to  i  milliard  994  millions,  of  which  sum  980 
millions  is  paid  as  wages  and  i  milliard  14  millions  is 
absorbed  in  profits  and  dividends.^ 

It  is  upon  these  figures  that  the  assertion  as  to  the 
proportion  borne  by  unpaid  to  paid  labour  is  based.  In  a 
working  day  of  twelve  hours,  it  is  said  that  the  capitalist's 
profit  is  equivalent  to  six  hours  and  six  minutes,  whilst 
five  hours  fifty-four  minutes  represent  the  time  for  which 
wages  are  paid :  or,  taking  the  figures  quoted,  this  means 
that  French  employers  extort  from  each  of  their  workmen 
an  annual  sum  equal  on  the  average  to  691  francs.  As  is 
well  known,  it  is  impossible  to  secure  complete  accuracy 
in  the  compilation  of  industrial  statistics,  but  accepting  the 
figures  quoted  by  the  editor  of  L^galite  as  being  correct, 
examination  shows  that  the  conclusions  drawn  from  them 
are  altogether  erroneous. 

From  the  aggregate  amount  of  annual  industrial  pro- 
duction in  France,  the  only  deduction  made  in  order  to 
ascertain  the  sum  left  for  profit  and  wages  is  the  cost  of 
raw  material  and  fuel ;  yet  it  requires  but  little  considera- 
tion to  show  that  many  other  deductions  ought  to  have 
been  made,  such,  for  instance,  as  general  expenses,  always 
a  heavy  item,  and  the  cost  of  commission,  agency,  insurance, 
postage,  travelling,  and  deterioration ;  again,  the  mainten- 
ance, repair,  and  renewal  of  buildings  and  machinery,  are 
heavy  expenses  which  must  be  taken  into  account.  But 
all  these  unavoidable  charges  upon  industrial  production 
are  ignored  in  these  calculations,  and  collectivists  appear 
to  think  that  the  total  gross   receipts,  less   the  amount 

['  The  small  difference  between  the  total  given  by  the  addition  of 
these  several  amounts  and  that  stated  as  the  total  annual  production 
is  caused  by  the  omission  of  negligible  fractions.] 


HOW  TO  CALCULATE  PROFIT  113 

chargeable  for  raw  material  and  fuel,  are  wholly  available 
for  distribution  in  the  form  of  profit  or  wages ! 

When  all  the  additional  expenses  referred  to  are 
taken  into  account,  the  alleged  profits,  which  it  should  be 
remembered  must  also  be  charged  with  interest  on  the 
capital  employed,  will  be  reduced  by  at  least  one-half, 
or  even  by  three-quarters,  and  in  place  of  the  alleged 
profit  of  I  milliard  14  millions  of  francs,  there  will  remain 
but  from  300  to  500  millions  at  the  outside,  a  profit  which  is 
by  no  means  excessive,  especially  when  it  is  remembered 
that  this  sum  is  not  merely  a  gratuitous  benefaction 
for  the  idle  or  the  incapable  shareholder,  but  includes 
payment  for  the  work  of  direction  and  management, 
functions  the  importance  of  which  it  is  impossible  to 
exaggerate. 

The  ability  required  for  the  successful  direction  of 
industrial  enterprise  is  of  two  kinds,  one  of  which  is  a 
capacity  for  the  skilful  adjustment  of  the  means  to  the 
end  and  for  the  economical  regulation  and  improvement 
of  production,  whilst  the  other  is  a  gift  for  the  successful 
practice  of  the  difficult  art  of  buying  and  selling.  All 
industry,  whether  national  or  local,  is  subject  to  the 
influence  of  these  abilities,  the  very  existence  of  which 
appears  to  be  unknown  to  collectivists ;  yet  they  are  of 
vital  importance  to  society,  since  it  is  upon  them  that  the 
financial  prosperity  of  a  community  must  depend.  They 
have  therefore  a  claim  to  remuneration  proportioned  to 
their  value,  and  it  is  only  envy  or  unreflecting  sentiment- 
ality that  would  deny  its  justice. 

If  profit,  as  collectivists  with  amusing  naivete  appear 
to  imagine,  could  be  calculated  by  counting  the  workmen 
employed  at  the  rate  of  x  francs  per  head,  commerce 
would  indeed  be  a  profitable  and  easy  profession  ;  but 
experience  tells  us  that  of  two  neighbouring  establish- 
ments, alike  in  equipment,  in  situation,  and  in  the  number 
of  workmen  employed,  it  often  happens  that  the  one 
succeeds  whilst  the  other  fails. 

Much  valuable  information  bearing  upon  this  subject 
may  be  gathered  from  the  reports  issued  by  joint  stock 

n 


114  FRENCH  COAL  INDUSTRY 

companies.  The  Fives-Lille  Company,  one  of  the  best- 
known     iron    foundries     in     France,    during    the    years 

1880  to  1883,  when  this  branch  of  industry  was  active, 
paid  a  dividend  of  30  fr.  per  share  on  24,000  shares, 
representing  a  total  net  profit  of  720,000  fr.  Taxation 
diminished  this  amount  by  almost  a  tenth,  leaving  barely 
648,000  fr.  for  the  shareholders.  Five  thousand  to  six 
thousand  workmen  were  employed  in  this  business,  so  that 
the  profit,  including  interest  on  capital,  in  place  of  being 
about  691  fr.  per  head  of  the  workmen  employed,  was  but 
little  more  than  100  fr. ;  this  company  paid  no  dividends 
between  1898  and  1902.  Another  well-known  foundry,  the 
"  Maison  Cail,"  which  also  employed  several  thousand  work- 
men, paid  no  dividends  for  eight  years ;  it  then  went 
into  liquidation,  and  returned  no  part  of  their  capital  to 
the  shareholders. 

The  journal  VEcho  du  Nord,  quoting  from  information 
officially  obtained  on  the  occasion  of  the  strikes  in  the 
"Nord"   department   in    1884,  showed  that   in   the  year 

1 88 1  the  20,701  workmen  employed  in  the  mines  of  that 
department  received  in  wages  20,529,406  fr.,  and  the  share- 
holders 2,751,914  fr.,  the  profit  in  this  case  being  equivalent 
to  one-eighth  part  of  the  wages,  or  33  fr.  per  workman. 
An  engineer,  M.  Pernolet,  commenting  upon  these  figures, 
says  :  "  The  20,701  men  referred  to,  allowing  a  maximum  of 
300  work-days  in  the  year  for  each  man,  worked  for 
6,210,300  days  in  the  year  1881,  receiving  20,529,406  fr. 
as  wages.  This  amount  gives  an  average  wage  for  work- 
men of  all  grades  of  3.306  fr.  a  day  each.  On  the  other 
hand,  the  2,751,914  fr.  paid  to  the  shareholders  as  a 
return  on  capital,  amounts  to  0.443  ^^-  ^  ^^V  foi"  each  man ; 
in  other  words,  the  coal  industry  in  the  department  of  the 
'Nord'  employed  20,701  workmen  of  all  grades  during 
the  year  1881  at  an  average  daily  wage  of  3.306  fr.,  whilst 
0.443  ^^'  o'^ly  was  contributed  by  each  towards  profit  and 
interest  upon  the  total  capital  required  for  the  founda- 
tion, preparation,  maintenance,  renewals,  and  administra- 
tion of  this  industry,  which  is  a  kind  of  investment  always 
hazardous  at  the  outset,  for  long  unproductive,  and  some- 


IF  CAPITAL  EARNED  NO  INTEREST        115 

times   ruinous,   but   which  is  necessary  if  the  population 
who  live  by  this  industry  are  to  have  any  assurance  for 
the  regularity  and  the  security  of  their  existence.     On  a 
former  occasion,"  M.  Pernolet  continues,  "  I  have  pointed 
out  that  an  examination  of  the  result  of  coal  mining  in 
the   *  Nord '   for   a  long  series  of  years,  not  all  of  them 
prosperous,   shows   that    the    dividends   received   by   the 
shareholders — that  is,  the  profits  on  the  capital  invested  in 
this  industry — barely  amounted  to  the  value  of  a  glass  of 
beer  for  each   working-day :  this,  then,  is   the  extent   of 
sacrifice  made  by  the  labourer  working  in  the  mines  of 
the  *  Nord '  as   his  share  of  the  cost  of  the  creation  and 
maintenance    of  this    industry,  by    which    the    tranquil 
existence  of  his  family  is  assured !     Here,  in  exact  figures, 
is  the  robbery  of  the  fruit  of  toil  by  the  idler  who  lives 
in  luxury ;  this  is  what  the  evangelists  of  the  bonne  parole 
call '  the  tyranny  of  capital,'  the  '  thefts  of  the  bourgeois.'  "  ^ 
Sometimes  the  profits  do  not  amount  to  as  much  as  a  glass 
of  beer  a  day !     It  appears  from  the  evidence  given  at  the 
parliamentary  enquiry  held  in  March  and  April  1884  at 
the  time  of  the  Anzin  strike,  that  the  well-known  company 
to  which   these  coal  mines  have  given  a  name,  employs 
14,000   workmen,  and   that   the  profit   of  the   last   year's 
working  only  amounted  to  1,200,000  fr.,  or  85.50  fr.  per 
head  of  the  workmen. 

Collectivists  ignore  the  ability  that  is  necessary  for 
success  in  conducting  industrial  enterprises,  and  deny  the 
supreme  importance  of  a  talent  for  combination  and 
the  value  of  intellectual  labour ;  they  do  not  take  into 
account  the  risk  of  loss,  and  they  contest  the  right  of 
capital  to  any  remuneration  for  its  employment.  But  it  is 
obvious  that  without  the  prospect  of  remuneration,  the 
production  of  capital  would  cease  ;  those  who  had  already 
put  by  sufficient  to  provide  for  their  own  old  age,  and  for 
a  moderate  provision  for  their  children,  would  desist  from 
the  practice  of  economy ;  they  would  spend  more  freely, 
and  there  would  be  a  great  increase  in  the  consumption 
of  luxuries ;  people  would  still  build  houses  for  their  own 
*  See  V Economiste  frafK^ais  du  9  fevrier  1884. 


116        THE  STARTING-POINT  OF  CAPITAL 

use,  but  not  for  that  of  others.  Hoarding  would  continue 
to  some  extent,  but  capitalisation,  or  the  conversion  of 
savings  into  productive  capital,  would  cease. 

It  is  now  desirable  to  look  more  closely  into  the  theory 
of  profit  or  *'  plus-value,"  upon  which  the  coUectivist  doctrine 
is  founded. 

Karl  Marx  has  treated  this  subject  at  great  length  and 
with  much  subtlety  in  his  celebrated  book,  Das  Kapital} 
The  first  part  of  this  work  consists  of  a  study  of  com- 
modities and  of  money  (waare  und  geld),  of  "  values-in- 
exchange  "  (tauschwerth)  and  of  *'  values-in-utility " 
(gebrauchswerth) ;  the  second  part  treats  of  the  trans- 
formation of  money  into  capital ;  the  third,  of  the  creation 
of  "  absolute  plus-value  "  ;  and  the  fourth  of  "  relative  plus- 
value."  It  will  be  seen  that  these  terms  are  used  in  a 
very  special  sense,  and  that  the  essence  of  the  coUectivist 
doctrine  is  contained  in  the  explanation  given  of  the 
characteristics  of  "  relative  plus- value." 

As  to  capital,  Marx  says :  *'  The  circulation  of  com- 
modities is  the  starting-point  of  capital ;  the  production  of 
commodities,  their  circulation,  and  its  development,  which 
is  commerce,  constitute  the  historic  conditions  under  which 
capital  came  into  being ;  its  modern  history  dates  from  the 
establishment  of  the  modern  system  of  cosmopolitan  trade, 
and  of  the  universal  market  in  the  sixteenth  century."  ^ 

This  definition  contains  d.  petitio  principii ;  it  is  histori- 
cally incorrect,  and  it  is  opposed  to  known  facts ;  from  the 
doctrinal  point  of  view  also,  it  is  inexact,  since  capital,  as 
has  been  shown,  includes  everything  reserved  for  ulterior 
production,  and  every  instrument  made  for  facilitating 
labour.  Robinson  Crusoe  both  possessed  and  created 
capital,  in  addition  to  that  which  he  recovered  from  the 
ship.  This  point  is  of  importance,  since  collectivists  deny 
that  capital  itself  can  be  productive.  If  Robinson  Crusoe 
constructed  a  wheel-barrow,  and  with  its  assistance  was 
able  to  work  with  greater  efficiency  and  with  less  expendi- 
ture of  labour,  it  is  clear  that  capital  in  the  shape  of  this 

1  Das  Kapital^  Kritik  der  politischen  ^konomie,  Karl  Marx, 
2nd  ed.     Hambourg.  2  Qp  ^//^  p^  jjg. 


CAPITAL  NO  NEW  PHENOMENON  117 

wheel-barrow  was  actually  productive.  Thus,  although  on 
Crusoe's  island  there  was  neither  trade  nor  exchange,  and 
he  could  neither  buy  nor  sell,  yet  capital  came  into  exist- 
ence in  the  shape  of  implements — that  is,  means  of  ulterior 
production. 

Like  Lassalle,  Karl  Marx  looked  upon  capital  as 
something  novel  and  transitory,  and  not  as  a  permanent 
phenomenon  coeval  with  the  earliest  progress  made  by  the 
human  race ;  but  our  ancestors  in  the  paleolithic  age 
created  and  possessed  capital,  for  their  clumsy  instruments 
facilitated  the  execution  of  their  work,  and  between  these 
barbaric  implements  and  a  sewing  machine  or  a 
locomotive,  the  difference  is  one  of  degree  only,  and  not  of 
kind.  The  capital  of  to-day  is  no  new  production  of 
civilisation  ;  it  is  the  result  of  the  continuous  development 
and  extension  of  a  phenomenon  which  has  existed  from 
the  remotest  antiquity.  Marx  declares  that  money  is  the 
final  product  of  exchange  of  commodities,  and  is  the  form 
in  which  capital  makes  its  first  appearance.  This  idea  is 
incorrect,  since  capital  exists  without  the  intervention  of 
money.  In  many  communities  the  use  of  gold  and  silver 
in  exchange  is,  at  any  rate  as  a  general  custom,  compara- 
tively recent.  Adam  Smith  mentions  that  in  his  time,  or 
but  little  before  it,  it  was  the  custom  in  the  English- 
American  colonies  to  exchange  commodities  for  com- 
modities. 

The  appearance  of  money,  or  some  token  of  exchange 
in  a  metallic  or  in  some  other  form,  was  certainly  posterior 
to  that  of  capital,  which,  as  has  been  shown,  can  exist  for 
an  individual  even  if  isolated,  or  for  a  family  producing 
only  for  its  own  consumption ;  and  although  at  the  present 
time  capital  is  frequently  associated  with  exchange,  the 
assertion  that  capital  is  a  phenomenon  dependent  upon 
the  existence  of  money  or  of  exchange,  is  both  historically 
and  doctrinally  untrue. 

Historically,  says  Marx,  capital,  whether  in  the  form  of 
bullion,  metallic  coin,  or  commercial  or  loan  capital,  always 
appears  in  contrast  to  property  in  land.  This  statement  is 
in  contradiction  to  Lassalle's  theory  that  capital  originated 


118  EXCHANGE 

in  the  division  of  labour  invented  by  a  landed  proprietor 
who  possessed  slaves,  and  although  approximately  correct, 
it  is  of  small  importance  from  an  economical  point  of 
view.  The  following  remark,  however,  which  applies  to  the 
present  time,  is  more  generally  true  :  "  Every  addition  to 
capital  first  appears  on  the  scene — that  is,  on  the  market  for 
goods,  for  labour,  or  for  exchange — always  as  money  which 
by  a  special  process  is  being  converted  into  capital,"  This 
definition  may  be  accepted  with  the  one  reservation,  that 
money  must  be  here  understood  to  mean  only  an  inter- 
mediate agent  or  token  which  represents  either  com- 
modities or  a  claim  upon  commodities. 

Since  money  is  a  token  of  exchange  in  general  and  at 
the  same  time  a  measure  of  value,  capital  is  valued  and 
calculated  in  terms  of  money,  and  is  represented  by 
money,  although  it  is  itself  generally  something  other 
than  money  ;  it  would  not,  for  instance,  be  strictly  accurate 
to  say  of  a  man  that  he  had  a  fortune  of  100,000  fr.  or 
1,000,000  fr.,  since  in  reality  money  may  represent  only  a 
small  part  of  his  property,  which  may  consist  chiefly  of 
commodities,  such  as  land,  houses,  credits,  or  shares  in 
various  businesses.  But  it  may  be  said  that  if  he  chose  he 
might  hold  his  property  in  the  form  of  coin.  This  might 
be  often,  but  by  no  means  always,  possible ;  if,  for  instance, 
the  French  were  suddenly  seized  with  a  desire  to  convert 
the  whole  wealth  of  the  country  (say,  150  or  160  milliards 
of  francs)  into  coined  money,  all  the  gold  and  silver  in  the 
world  would  not  supply  the  sum  required. 

Admitting  for  what  it  is  worth,  the  statement  that  new 
capital  first  appears  in  the  form  of  money,  how  does  Marx, 
starting  from  this  point,  arrive  at  the  conclusion  that 
"  capital "  is  nothing  but  unrequited  labour  ? 

Commerce,  he  says,  consists  at  the  present  day  in  the 
conversion  of  commodities  into  money,  and  then  of  money 
into  other  kinds  of  commodities ;  it  implies  exchange,  by 
means  of  an  intermediary  which  is  money,  of  one  kind  of 
"  values-of-utility "  against  another  kind  of  "  values-of- 
utility" — for  example,  of  bread  for  boots.  This  is  the 
primitive  form  of  commerce,  and  the  only  one,  according  to 


THE  CIRCULATION  OF  MONEY  119 

Marx,  which  concerns  political  economy ;  it  is,  in  fact,  an 
organised  form  of  the  barter  of  former  times.  But  he  says 
in  a  capitalistic  society  the  proceeding  is  reversed  :  money 
is  exchanged  for  commodities,  which  are  then  again 
converted  into  money.  In  place  of  starting  from  the 
exchange  of  a  "  value-of-utility  "  for  a  "  value-in-exchange  " 
in  order  to  obtain  another  "  value-of-utility  "  for  consump- 
tion, the  process  is  to  convert  a  "  value-in-exchange  "  into 
a  "  value-of-utility  "  in  order  to  obtain  another  "  value-in- 
exchange."  What  distinguishes  a  capitalistic  society  is 
that  in  production  it  disregards  "  values-of-utility,"  and 
pays  attention  only  to  "  values-in-exchange " :  money  is 
both  the  point  of  departure  and  the  goal  of  production, 
which  is  therefore  organised  with  a  view  to  the  money 
profit  that  may  be  realised,  and  not  with  regard  to 
consumption. 

It  is  necessary  to  dwell  upon  these  distinctions,  since 
it  is  upon  them  as  a  basis  that  Karl  Marx  and  Lassalle 
construct  their  systems ;  but  apart  from  this  they  are  of 
importance,  and  deserve  the  attention  of  economists. 

When  commodities  are  exchanged  for  money,  and 
with  this  money  other  commodities  are  purchased,  the 
transaction  is  not  wasted  labour — one  kind  of  merchandise 
is  exchanged  for  another,  as,  wheat  for  clothes,  tobacco 
for  shoes,  etc. ;  but  to  convert  money  into  commodities  and 
back  again  into  money,  in  the  absence  of  any  definite 
object,  would  be  an  obviously  futile  operation ;  but  under 
a  capitalistic  system,  this  object  is  the  profit  obtainable 
by  purchasing  commodities  and  reselling  them  at  an 
increased  price.  Thus,  in  the  capitalistic  circulation  of 
money,  it  is  not  consumption  but  circulation  which  is 
the  object.  "  The  circulation  of  money  in  the  shape  of 
capital  is  an  end  in  itself,  since  increase  of  value  cannot 
be  produced  except  by  its  never-ending  repetition ;  thus 
the  movement  of  capital  is  endless  and  unlimited."^  To 
the  gain  which  capitalists  secure  by  this  process,  Marx 
gives  the  name  "plus-value."  Capital,  he  says,  has  the 
faculty  of  laying  golden  eggs." 

^  Marx,  op.  ctt.y  p.  135.  ^ Ibid.y^.  \yj. 


120  INDIVIDUAL  QUALITIES 

A  criticism  upon  this  analysis  that  at  once  suggests 
itself  is,  that  it  applies  only  to  capital  used  in  commerce 
or  finance,  and  not  to  that  employed  in  industry  or 
agriculture ;  again,  it  is  obvious  that  the  mere  circulation 
of  capital  will  not  of  itself  be  necessarily  productive  of 
"  plus-value  " ;  many  persons  put  capital  in  circulation,  but 
derive  no  profit  from  doing  so,  and  many  merchants  and 
bankers  are  ruined  by  the  process.  It  is  calculated  that 
in  France,  out  of  ten  persons  who  embark  in  business, 
barely  two  are  successful,  two  or  three  are  just  able  to 
live  out  of  their  business,  but  are  unable  to  increase  their 
capital,  whilst  the  remainder  lose  both  their  own  property 
and  that  of  others.  Merely  to  put  money  in  circulation, 
therefore,  will  not  suffice  to  secure  a  profit ;  it  is  no  doubt 
always  the  intention,  but  by  no  means  the  certain  result ; 
and  when  success  is  attained,  it  must  obviously  be  due  to 
the  personal  qualities  of  the  individual  who  undertakes 
the  venture. 

Marx,  therefore,  has  by  no  means  succeeded  in  proving 
his  thesis  that  money  increases  by  the  mere  process  of 
circulation,  nor  has  he  invalidated  the  dogma  of  econo- 
mists that  profit  represents  the  remuneration  for  services 
rendered. 

The  claim  advanced  by  the  German  socialist  is,  how- 
ever, even  more  extensive.  He  declares  that  his  theory  of 
"  plus-value  "  is  as  true  of  "  industrial "  as  of  "  commercial " 
capital.  Industrial  profit,  he  asserts,  is  neither  the  result 
of  the  productivity  of  capital  nor  of  the  intelligence  of  the 
adventurer,  nor  does  it  represent  remuneration  for  services 
rendered  ;  it  is  entirely  derived  from  that  portion  of  the 
labourer's  work  which  the  employer  appropriates  without 
paying  for  it. 

Marx  has  developed  this  idea  with  remarkable  in- 
genuity ;  but  industrial  statistics  and  the  mechanism  of 
commercial  exchange  give  no  support  to  it,  and  it 
remains  to  be  seen  whether  by  his  analysis  of  the 
methods  of  industry  Marx  is  more  successful  in  estab- 
lishing the  truth  of  his  thesis. 

In  accordance  with   his   usual    insidious   method,  he 


COMMERCE  HAS  REPLACED  BARTER       121 

starts  with  an  assumption  which  he  treats  as  being 
axiomatic:  "The  exchange  of  equivalents  cannot  pro- 
duce profit.  Where  there  is  equaHty,  there  can  be  no  gain. 
By  an  exchange  of  '  values-of-utility,'  both  parties  may  be 
gainers,  but  not  when  *  values-in-exchange '  are  the  subject 
of  the  transaction."  To  prove  these  statements,  Marx  appeals 
to  various  authorities — to  professors  of  popular  economy, 
of  philosophy,  and  of  scientific  history — and  quotes  from 
many  authors.  Fortified  by  these  authorities,  he  insists 
that  exchange  cannot  be  the  origin  of  "  plus-value "  and 
of  the  conversion  of  money  into  capital.  This  assertion  is 
correct  in  respect  of  the  exchange  or  "  barter  "  in  primitive 
societies;  in  this  case  the  only  advantage  derived  by 
either  party  would  be  the  acquisition  of  an  object  more 
suited  to  his  needs  at  the  moment  than  that  given  in 
exchange,  and  which  would  not  add  to  his  wealth ;  but  it 
is  quite  untrue  with  regard  to  the  industrial  organisation 
of  the  present  day,  in  which  "commerce"  has  taken  the 
place  of  "barter"  and  "exchange"  has  become  a  pro- 
fession. 

It  is  the  business  of  those  who  follow  this  profession 
to  divine  and  anticipate  the  wants  of  the  public,  to  attract 
clients,  by  means  of  agents  and  advertisements,  and  to 
save  them  trouble  and  inconvenience ;  to  do  this  success- 
fully demands  a  vast  expenditure  of  trouble  and  energy, 
and  involves  much  risk,  since  the  business  is  a  specula- 
tion which  may  turn  out  well  or  ill,  and  success  will 
depend  upon  the  correctness  of  judgment,  the  excellence 
of  the  system,  and  finally,  upon  whether  the  services 
proffered  are  useful  or  not  to  the  community  in 
general. 

All  this  has  escaped  Marx,  who  is  possessed  with  the 
idea  that  the  capitalist  is  an  idler  devoid  of  intelligence 
and  incapable  of  any  form  of  activity  useful  to  the 
community.  The  owner  of  money  he  looks  upon  as  the 
larva  from  which  the  capitalist  is  developed ;  he  buys 
merchandise  and  sells  it,  and  it  is  only  when  he  succeeds 
in  realising  a  "  plus-value "  by  the  transaction,  that  he 
himself  becomes  a  capitalist,  the  characteristic  of  capital 


122  LABOUR-FORCE 

being  to  create  "  plus-value."  But  it  is  not  the  mere  fact 
of  "exchange"  which  necessarily  produces  the  "plus- 
value";  whence,  then,  does  it  come?  The  whole  secret 
lies  in  the  purchase  and  utilisation  of  "  labour-force " 
(arbeitskraft),  which  term  must  be  understood  to  include 
all  those  intellectual  qualities  which  men  employ  in  the 
production  of  "  values-of-utility." 

In  order  that  the  possessor  of  money  should  be  able  to 
buy  labour-force  in  the  market,  various  conditions  must 
co-exist ;  the  possessor  of  labour- force  must  be  free,  he  must 
be  juridically  upon  an  equality  with  the  purchaser  of  his 
labour,  and  he  must  not  be  in  a  position  to  use  his  labour 
directly  for  his  own  profit ;  but  if  the  workman  has  no 
money,  the  semblance  of  equality  is  quite  deceptive,  and 
merely  gives  an  appearance  of  legality  to  a  contract  which 
in  reality  is  inequitable.  According  to  Marx,  the  co- 
existence of  these  necessary  conditions  is  made  possible 
by  circumstances  which  are  only  to  be  found  in  a  capit- 
alistic society,  one  of  the  most  important  being  that  under 
this  regime  men  have  long  been  deprived  of  the  possession 
of  the  instruments  they  require  for  their  work,  and  are 
therefore  unable  to  work  independently. 

Quite  a  long  period  of  evolution  was  necessary,  Marx 
declares,  for  the  creation  of  a  labour  market.  "  How,"  he 
asks,  "is  the  business  of  this,  the  most  universal  of  all 
markets,  transacted  ?  How,  when  the  purchaser  meets  the 
vendor,  is  the  price  of  labour-force  arrived  at  ? "  The  reply 
given  by  the  orthodox,  or  as  he  contemptuously  calls  it, 
the  "  popular "  school  of  economy,  is  that  it  is  settled  by 
supply  and  demand  ;  Marx,  however,  rejects  this  answer 
as  being  inadequate  and  tautological ;  labour-force,  like  all 
other  commodities,  has  a  value  independent  of  and  pre- 
existent  to  any  bargain  for  its  employment.  This  value  is 
the  cost  of  its  production,  or  in  other  words  the  expense  of 
maintaining  and  renewing  the  strength  of  the  labourer  and 
providing  for  his  family  and  the  education  of  his  children. 
Although  this  expense  must  vary,  it  is  nevertheless 
possible  to  conceive  of  an  average  cost  for  labour- 
force. 


THE  «  IRON  LAW  "  OF  LASSALLE  123 

The  "value-in-exchange"  of  labour-force  is  therefore 
said  to  be  fixed  by  the  cost  of  its  maintenance  and 
renewal.  This  is  the  famous  "  iron  law  "  of  Lassalle,  who 
asserted  that,  however  great  the  progress  of  industry, 
wages  can  never  remain  permanently  in  excess  of  a  rate 
determined  by  the  cost  of  the  maintenance  and  renewal  of 
labour-force. 

This,  again,  is  a  petitio  principii  for  which  there  is  no 
justification.  The  cost  of  subsistence  represents  the 
"  minimum  "  wage  in  normal  times,  and  not  the  natural 
wage.  The  evidence  of  our  own  eyes,  as  well  as  that  of 
statistics,  tells  us  that  in  most  countries,  if  not  in  all, 
wages  are  higher  than  is  absolutely  necessary  for  subsist- 
ence. If  Marx'  assertion  were  correct,  the  incontestable 
amelioration  in  the  condition  of  the  labouring  class  during 
the  past  fifty  or  one  hundred  years  would  be  inexplicable 
and  against  nature ;  but  since  it  is  a  well-known  fact,  it 
must  be  in  conformity  with  natural  law,  which  cannot  err, 
and  it  is  Marx'  theory,  therefore,  which  must  be  incorrect. 
When  the  choice  lies  between  well-established  facts  and  a 
theory  which  is  incompatible  with  them,  the  theory  must 
be  rejected. 

Those  who  rely  upon  the  law  of  Malthus,  that  the 
reproductive  force  of  humanity  tends  to  make  population 
always  redundant  in  relation  to  the  means  of  subsistence, 
as  supporting  Marx'  theory,  forget  that  this  so-called  law 
is  in  no  sense  an  economical  law,  but  simply  a  physio- 
logical hypothesis,  which,  if  well  founded,  would  show  the 
existence  of  a  menace  to  humanity  analogous  to  that 
contained  in  the  theory  of  the  gradual  refrigeration  of  the 
earth,  against  which  neither  collectivism  nor  any  other 
social  system  would  be  any  protection ;  to  make  this  so- 
called  law  a  ground  for  attacking  the  science  of  economy 
is  puerile. 

Although  Marx,  more  philosophical  than  Lassalle,  does 
not  indulge  in  violent  invective,  his  dialectic  is  no  whit  less 
defective.  Neither  he  nor  Lassalle  affirm  that  the  cost  of 
subsistence  of  the  workman  and  his  family  is  a  fixed 
amount  at  all  times  and  in  all  countries :  again,  according 


124  COST  OF  SUBSISTENCE 

to  Marx,  labour-force,  unlike  any  other  commodity, 
includes  a  moral  element.  The  significance  of  this  state- 
ment, which  is  fatal  to  his  system,  is  unperceived  by  its 
author;  if  once  this  element  is  admitted,  the  cost  of 
subsistence  can  no  longer  be  a  fixed  sum,  and  must  be 
partly  dependent  upon  the  will  of  the  workman  himself,  or 
rather  upon  that  of  the  class  to  which  he  belongs. 

The  value  of  labour-force,  Marx  continues,  must  be 
equivalent  to  the  value  of  the  sum  of  the  different  objects 
which  the  workman  requires  for  his  subsistence ;  all  these 
are,  of  course,  not  wholly  consumed  in  a  day — clothing,  for 
example,  or  education — but  the  cost  per  day  may  be 
estimated.  If  experience  shows  that  the  necessary  objects 
can  be  procured  by  six  hours'  daily  work,  for  which  the 
remuneration  is  three  francs,  then  the  "  value-in-exchange  " 
of  a  day's  labour-force  is  three  francs. 

Having  laid  down  these  premises,  which  in  reality  beg 
the  question,  Marx  invites  us  to  observe  the  process  of 
production  closely.  The  possessor  of  money,  he  says,  in 
process  of  development  into  a  capitalist,  provides  all  that 
is  necessary  for  manufacture — raw  material,  machines, 
workshops,  and  labour-force.  The  actual  organisation  of 
the  industry  presents  two  striking  characteristics :  the 
seller — that  is,  the  labourer — works  under  the  direct 
control  of  the  purchaser  of  labour-force — that  is,  the 
employer — and  is  not  the  owner  of  the  product  of  his 
own  labour.^ 

By  doing  his  work  before  he  receives  his  wages,  the 
workman  gives  credit  to  the  capitalist ;  it  follows  from  this 
that  an  injustice  is  committed  if  the  wage  earner  is  made 
to  wait  unduly  for  his  wages,  as,  for  instance,  when  they 
are  only  paid  once  a  month. 

The  capitalist  is  the  initiator  of  work.  His  capital  is 
divided  into  two  parts,  the  proportions  of  which  vary  with 
the   nature  of  the  industry,  the  time,   and   the  country. 

*  Marx  would  have  done  better  to  speak  of  the  common  product, 
since  he  again  begs  the  question  by  the  tacit  assumption  that  the 
produce  of  labour  assisted  by  machines  and  appHances  is  the  same 
thing  as  the  product  of  unassisted  labour. 


CLAIM  OF  CAPITAL  TO  REDEMPTION      125 

One  part  is  employed  in  providing  materials,  buildings, 
machinery,  and  implements  of  all  kinds ;  to  this  portion 
Marx  gives  the  name  of  "  constant "  or  "  fixed  "  capital  ; 
the  remaining  part,  which  provides  the  labour-force  re- 
quired, he  calls  "  variable  "  capital. 

In  the  process  of  manufacture,  raw  material  of  various 
kinds  is  consumed,  and  machines,  which  deteriorate  by 
use,  are  employed.  The  industrial  operation  ought,  there- 
fore, to  reproduce  all  these  things  either  wholly  or  partially 
in  the  value  of  the  produce ;  but  if  this  were  all,  the  total 
value  of  the  product  would  be  no  more  than  that  of  the 
articles  consumed,  without  any  profit  or  "  plus-value."  In 
the  case  of  machinery,  for  instance,  the  value  of  the 
product  ought  to  include  such  a  sum  as  would  be  required 
to  maintain  it  in  order  and  to  provide  for  its  replacement 
when  worn  out.  Marx  admits  that  capital  invested  in 
machinery  has  a  just  claim  to  redemption,  but  not  to 
interest ;  this  limitation,  however,  is  quite  unreasonable  ;  it 
is,  in  fact,  an  application  to  machinery  of  the  sophism 
enunciated  by  the  French  socialist,  Briosne,  with  regard  to 
house  property  referred  to  above — namely,  that  a  landlord 
is  amply  recompensed,  indeed  obtains  more  than  his  due,  if 
the  tenant  maintains  his  house  in  repair.  No  one,  however, 
would  build  houses  on  such  terms,  nor  would  anyone 
construct  machines  if  no  profit  were  to  be  derived  from 
them.  A  machine  adds  to  the  productivity  of  the  work- 
man who  has  the  use  of  it ;  it  was  made  for  this  purpose, 
with  the  perfectly  legitimate  intention  that  the  maker,  or 
the  purchaser,  who  has  the  same  rights  as  the  maker, 
should  derive  profit  from  it.  The  barrow  which  Crusoe 
constructed  produced  no  immediate  return,  but  made  his 
labour  more  efficient  and  productive.  Suppose  that  new- 
comers to  his  island  asked  for  the  loan  of  his  barrow, 
saying  that  they  would  undertake  to  keep  it  in  repair  and 
return  it  to  him  in  good  condition ;  would  not  Crusoe 
reply :  "  That  is  not  sufficient.  With  the  aid  of  this  barrow 
you  can  do  twice  the  amount  of  work  that  you  could  do 
without  it ;  this  increase  of  productivity  is  due  to  me,  the 
maker  of  the  barrow,  and  I  have  a  claim  to  a  share.    Let  us 


126  CRUSOE  AND  HIS  BARROW 

divide  it ;  you  shall  give  me  a  share,  and  you  will  still 
remain  gainers  by  the  transaction.  If  you  refuse  this  offer, 
you  must  make  a  barrow  for  yourselves."  Who  can  say 
that  such  action  would  be  extortionate  on  Crusoe's  part  ? 
No  doubt,  if  he  desired  to  be  generous  or  charitable,  he 
might  lend  his  barrow  for  nothing ;  but  the  justice  which 
ought  to  govern  social  relations,  gives  him  an  indisputable 
right  to  a  portion  of  the  increased  return,  which  the  use  of 
his  barrow  made  possible,  and  which  was  not  due  to  the 
borrower  alone,  but  was  the  result  of  his  co-operation  with 
the  maker  of  it.  Similar  reasoning  applies  with  equal 
force  to  all  machinery  and  to  all  capital.  The  maker  or 
the  owner  of  a  machine  has  a  right  to  interest  or  profit  in 
return  for  its  "  value-in-utility  "  as  represented  by  the  in- 
crease of  productivity  of  labour  it  makes  possible.  Imagine 
a  machine  to  be  a  living  being  capable  of  bargaining  for 
himself:  no  one  could  deny  the  justice  of  his  claim  to  a 
share  of  the  extra  production  or  profit  due  to  his  agency ; 
yet  the  maker  or  the  possessor  of  the  machine  has  precisely 
the  same  rights  as  the  machine  itself  would  have,  if  it 
possessed  life  and  intelligence.  Thus,  we  see  how  Marx 
is  entangled  by  the  petitio  principii  involved  in  his  state- 
ment, that  what  he  calls  "  constant  capital "  cannot 
produce  "  plus- value."  In  reality,  this  so-called  "  constant " 
capital,  especially  machinery,  and  buildings  which  give 
shelter  to  the  workmen,  do  actually  produce  a  profit  or 
"  plus-value " ;  it  is  for  this  reason  alone  that  they  exist, 
and  with  this  object  they  were  constructed. 

If  machines  produced  no  profit,  if  they  added  nothing 
to  the  productivity  of  labour,  or  if  buildings  which  make 
it  possible  for  workmen  to  carry  on  their  labour  without 
inconvenience,  were  not  productive  of  profit,  why  should 
it  have  occurred  to  anyone  to  take  the  trouble  to  construct 
them?  Marx,  however,  deliberately  closes  his  eyes  to 
all  these  considerations;  that  description  of  capital  so 
quaintly  labelled  by  him  "  constant "  is,  he  declares, 
incapable  of  producing  "  plus-value,"  which  can  only  be 
produced  by  what  he  terms  "  variable "  capital,  or  that 
which  is  used  to  pay  wages,  and  he  endeavours  to  explain 


REAL  SUFFERERS  IF  CAPITAL  DISAPPEARS  127 

why  this  should  be  so.  When  the  labourer  has  worked 
six  hours  a  day,  the  industrial  operation  is  complete  ;  the 
capitalist  sells  the  product,  and  if  there  is  no  "  plus- 
value,"  he  grumbles  and  protests  that  he  will  give  up 
his  business.  Such  a  complaint  is  indeed  quite  natural, 
since  there  can  be  no  reason  why  the  poor  capitalist 
should  take  upon  himself  to  save,  to  buy  machines,  and 
raw  material,  to  superintend  the  work  of  manufacture, 
to  sell  the  produce,  to  incur  risks,  to  toil,  and  undergo 
fatigue  of  body  and  mind,  if  at  the  end  of  it  all  he  only 
succeeds  in  recovering  the  actual  cost  of  production,  and 
is  left  not  only  without  profit,  but  even  without  interest 
upon  his  capital.  He  would  certainly  be  justified  in 
declaring  that  he  would  give  up  his  business  and  close 
his  works,  and  would  lose  nothing  by  doing  so ;  the  real 
sufferers  would  be  his  workmen,  whose  labour,  without 
machines  and  workshops  to  shelter  them,  would  be  not 
only  more  distressing,  but  far  less  efficient  and  productive. 

Under  the  circumstances  described  "  profit "  would 
not  exist,  and  the  result  would  be,  that  capital  would  no 
longer  concern  itself  with  production — in  other  words,  it 
would  cease  to  supply  the  means  of  production,  such  as 
factories,  machines,  or  intelligent  superintendence  and 
direction.  It  is  at  this  point,  according  to  Marx,  that 
"  plus- value,"  so  eagerly  sought  after  and  so  much 
criticised,  appears  upon  the  scene. 

The  "value-in-exchange"  of  labour-force  is,  by 
hypothesis,  equivalent  to  the  product  of  six  hours' 
work,  which  period  suffices  to  produce  the  commodities 
necessary  for  the  existence  of  the  workman  ;  but  the  work 
day  is  not  six  hours :  it  is  sometimes  ten,  twelve,  or 
fourteen  hours ;  and  thus,  whilst  the  capitalist  pays  the 
"  value-in-exchange  "  of  the  labour-force  he  buys — that  is, 
six  hours — he  obtains  its  "  value-in-use,"  which  is  ten, 
twelve,  or  fourteen  hours.  There  are  thus  four,  six,  or 
eight  hours  of  work  (Marx  puts  the  average  at  six),  for 
which  he  does  not  pay,  but  the  produce  of  which  he 
appropriates,  and  from  which  his  profit  (plus-value)  is 
derived ;  Marx  does  not,  however,  explain  why  the  workman 


128    THE  ROBBERY  OF  THE  WAGE  EARNER 

should  consent  to  work  for  so  much  longer  than  is 
necessary  to  secure  his  own  subsistence. 

Marx  attempts  to  show  by  reference  to  industrial 
processes,  that  the  "  utility  value "  of  labour-force  is 
double  that  of  its  "value-in-exchange."  By  the  division 
of  labour,  the  establishment  of  workshops,  etc.,  he  says, 
the  productivity  of  the  workman  is  greatly  increased ;  but 
his  remuneration,  which  by  hypothesis  is  equivalent  to 
the  cost  of  his  subsistence,  remains  the  same.  This 
increase  of  productivity  is  itself,  he  asserts,  a  social 
product — that  is,  it  is  the  result  of  discoveries,  inventions, 
and  adaptations  of  society  as  a  whole — whilst  it  is  the 
capitalist  who  alone  obtains  the  benefit  of  it. 

In  making  this  statement  Marx  is  entirely  mistaken ; 
when  (as  always  occurs  before  long)  industrial  improve- 
ments have  become  socialised,  it  is  no  longer  the  capitalist, 
but  the  public  as  consumers  who  really  profit  by  them, 
owing  to  the  diminution  of  prices  due  to  increased 
productivity ;  and  it  is  only  in  his  capacity  of  a  consumer 
that  the  capitalist  derives  any  benefit.  Again,  the  assertion 
that  the  capitalist  confiscates  the  discoveries  of  science, 
and  uses  them  gratuitously  for  his  exclusive  advantage, 
is  equally  false.  No  doubt  an  inventor  (who  is  not  usually 
a  capitalist  as  well),  in  countries  where  inventions  can  be 
patented,  enjoys  for  a  time  the  exclusive  benefit  of  his 
discovery ;  but  it  is  in  the  character  of  inventor,  and  not 
as  a  capitalist,  that  he  possesses  the  right,  which  lasts 
only  for  a  limited  and  short  period.  This  question  of 
patents  is,  no  doubt,  a  controversial  one,  and  some 
industrial  nations — Switzerland,  for  example — have  refused 
to  grant  exclusive  property  in  technical  processes  to  the 
inventor  of  them ;  but  whatever  may  be  the  opinion  or 
practice  in  this  respect,  it  is  certain  that  after  a  longer 
or  a  shorter  interval,  quite  insignificant  in  the  life  of 
humanity,  every  invention  becomes  socialised — that  is, 
open  to  all,  and  free  from  exclusive  rights. 


CHAPTER   III 

Variation  of  "plus-value."  "Absolute"  and  "relative  plus-value." 
Function  of  the  capitalist.  "Competition."  Methods  for  the 
increase  of  "plus-value."  Legislative  remedies.  Excess  of 
wage  earners.  Introduction  of  machinery.  Machinery  a 
defence  of  wage  earners.  Improved  condition  of  wage 
earners.     Decrease  of  pauperism. 

Marx  refers  the  variations  and  increase  of "  plus-value " 
to  two  causes :  the  first  is  the  increase  of  the  workman's 
productivity,  due  to  improvements  in  machinery  and  in 
industrial  organisation ;  that  part  of  the  capitalist's  profit 
which  arises  from  this  cause,  Marx  distinguishes  as 
"  absolute  plus- value."  The  second  cause  is  the  increased 
productivity  of  the  workman  considered  in  relation  to  the 
cost  of  his  living ;  this  would  diminish  the  "  value-in- 
exchange"  of  his  labour  (assumed  to  be  determined  by 
the  cost  of  subsistence),  whilst  his  hours  of  work  would 
continue  unchanged,  and  thus  "plus- value"  would  be 
increased.  To  the  profit  derived  from  the  lowering  of 
the  cost  of  labour,  Marx  gives  the  name  of  "  relative 
plus-value." 

This  theory  is  effectually  controverted  by  the  facts  of 
everyday  life,  which  show  that  when  the  cost  of  living 
falls,  workmen  do  not  find  that  their  wages  fall  in 
proportion ;  what  really  happens  is  that  they  are  better 
fed,  better  clothed,  and  consume  more  wine,  meat,  coffee, 
tobacco,  etc. 

The  improved  condition  of  the  workman  of  to-day  as 
compared  with  former  times  has  become  a  commonplace, 
and  although  no  doubt  all  workmen  have  not  benefited 
equally,  at   least   nine-tenths   of  the  class  have  derived 

129  J 


130  "BUSINESS'^ 

very  great  advantages  from  the  changes  that  have  taken 
place.  This  statement,  of  course,  does  not  include 
paupers  ;  but  even  at  this  extremity  of  the  social  scale, 
physical  misery  is  now  less  intense,  and  conditions  are 
less  degrading  than  formerly.  Again,  disregarding  for 
the  moment  the  assertion  that  increased  efficiency  more 
than  counterbalances  the  effect  of  shorter  hours,  and  in 
spite  of  the  assertions  of  Marx  and  Stuart  Mill,  it  may  be 
safely  affirmed  that  progress  in  most  industries  has  also 
brought  about  a  reduction  in  the  length  of  the  work- 
day. 

If  Marx'  theory  were  true,  and  industrial  profit  could 
be  so  easily  secured,  it  would  be  both  certain  and  approxi- 
mately uniform,  whereas,  in  fact,  nothing  can  be  more 
uncertain  or  subject  to  greater  variation  ;  it  is  sometimes, 
although  rarely,  very  large,  but  it  is  usually  moderate,  and 
often  non-existent. 

Industrial  profit  does  not  depend,  as  Marx  asserts,  upon 
the  relation  of  material  things  to  each  other,  but  upon  the 
relation  between  them  and  human  beings ;  the  capitalist 
is  not  merely  capital  personified ;  he  is  a  living  being,  who, 
by  his  personality,  influences  the  productivity  of  capital, 
and  secures  or  fails  to  secure  a  profit.  Profit,  therefore, 
must  have  some  origin  other  than  the  purely  mechanical 
one  Marx  assigns  for  it ;  and,  without  going  outside  his 
analysis,  it  is  easy  to  specify  the  various  and  natural 
causes  which  give  rise  to  profit. 

Having  defined  "  absolute  "  and  "  relative  plus-value," 
Marx  comes  to  the  conclusion  that  the  capitalist  is  an 
exploiter,  and  that  "  business "  means  the  exploitation  of 
the  workmen.  When  slavery  existed,  the  sole  object  of 
the  slave  owner  was  to  extract  the  utmost  "plus-value" 
possible  from  his  workmen,  and  the  capitalist  of  to-day  is 
his  counterpart  in  modern  society ;  he  also  has  ingenious 
ways  of  surreptitiously  increasing  "  plus- value  "  and  craftily 
appropriating  the  proceeds  of  another's  toil.  The  capi- 
talist, he  asserts,  retains  without  payment  about  one-half 
of  the  value  of  the  workman's  labour,  a  proportion 
which,  so  long  as  society  is  organised  upon  a  capitalist 


T 


CAPITAL  PERSONIFIED  131 

system,  tends  constantly  to  increase  with  the  advance  of 
civilisation. 

In  attempting  to  substantiate  these  bold  assertions, 
Marx  encounters  obstacles  which  would  have  intimidated 
a  less  opinionated  or  less  arrogant  spirit.  The  English 
economists,  Senior  and  Wilson,  have  shown  that  the 
manufacturer's  profit  is  earned  during  the  last  of  the  ten 
or  eleven  hours  which  constitute  the  work-day,  and  from 
the  facts  cited  by  these  economists,  it  is  evident  that  the 
portion  of  the  workman's  labour  which  represents  the 
employer's  profit,  even  assuming  (which  is  not  the  case) 
that  a  profit  may  be  relied  upon,  is  very  far  indeed  from 
being  equivalent  to  half  the  number  of  hours  worked.  In 
place  of  replying  to  these  arguments,  Marx  has  recourse 
to  irony  and  abuse ;  but  the  ability  and  precision 
of  statement  of  his  opponents  deserve  very  different 
treatment. 

In  describing  the  function  of  the  capitalist  in  modern 
industry,  Marx  says  :  "  The  personification  of  capital,  or 
the  capitalist,  so  arranges  the  work  that  the  workman 
performs  his  task  with  ordered  regularity,  and  with 
an  adequate  amount  of  energy."  i  This  affectation  of 
treating  capitalists  as  being  capital  personified  is  merely  a 
convenient  way  of  suppressing,  or  eliminating  from  dis- 
cussion, the  consideration  of  the  intellectual  and  moral 
qualities,  which  are  the  predominating  influence  in  shaping 
the  destiny  of  industrial  and  commercial  ventures.  The 
capitalist,  according  to  Marx,  is  a  newcomer  in  the  in- 
dustrial world.  The  chief  craftsman  or  the  master  of  former 
days,  who  was  himself  a  workman,  was  not  a  prototype  of 
the  capitalist  of  to-day :  the  old  craft  laws,  by  restricting 
the  number  of  workmen,  made  "  capitalisation  "  impracti- 
cable, and  the  true  capitalist  only  appeared  when,  this 
restriction  having  disappeared  and  production  having 
increased,  division  of  labour  supervened,  and  the  head 
craftsman  or  master,  released  from  the  necessity  of  actual 
manual  labour,  was  able  to  devote  himself  entirely  to  the 
organisation  and  control  of  the  labour  of  others,  to  the 
^  Das  Kapitaly  p.  315. 


132      THE  FUNCTION  OF  THE  CAPITALIST 

purchase  of  raw  material,  and  to  the  sale  of  goods  manu- 
factured. These,  according  to  Marx,  are  the  conditions 
from  which  the  capitalist  has  been  developed.  But,  we 
may  ask,  is  this  the  only  function  of  the  capitalist,  or 
rather — since  all  terms  are  confused  by  Marx,  and  precision 
is  desirable — of  the  trader  or  manufacturer?  When  the 
conditions  above  described  occur,  the  manufacturer,  whose 
function  is  to  direct  industrial  operations,  becomes  an 
essential  factor  of  the  social  organisation.  Marx  repre- 
sents this  function  as  being  mere  routine  work,  and 
regards  the  capitalist  as  a  kind  of  overseer,  or  as  the  task- 
master of  galley-slaves.  In  support  of  this  inaccurate  and 
inadequate  conception,  he  expounds  with  much  ingenuity 
the  theory  of  co-operation  (in  the  primitive  meaning  of  the 
word),  or  the  combination  of  forces — in  other  words,  the 
division  and  association  of  labour,  conditions  which  are 
correlative.  The  productive  power  of  isolated  human 
labour,  he  says,  is  but  small :  in  combination  it  is  infinitely 
greater ;  the  capitalist  pays  for  the  former,  but  actually 
obtains  the  latter,  which,  being  dependent  upon  co-opera- 
tion, may  be  called  social  productivity.  Economies  effected 
by  the  better  organisation  of  labour,  by  more  economical 
use  of  raw  material,  by  ingenious  subdivision  of  processes 
of  manufacture,  and  by  securing  continuity  of  production, 
are  the  principal  causes  which,  together  with  others  of  a 
quite  different  character,  give  co-operation  so  great  an 
advantage  over  isolated  labour.  All  this,  although  not 
new,  is  true,  but  at  this  point  error  creeps  in.  "  It  is," 
says  Marx,  "this  particular  result  of  the  superiority  of 
social  over  individual  labour  which  the  capitalist  appro- 
priates, and  which  by  a  fiction  is  made  to  appear  as  if  it 
were  an  element  inherent  in,  and  naturally  pertaining  to, 
capital." 

This  is  Marx'  favourite  thesis ;  it  is  capital  alone, 
according  to  him,  that  profits  by  improved  machinery, 
better  methods  of  manufacture,  and  the  progress  of  science. 
Wages  are  not  increased  by  these  improvements,  and 
society  in  general,  apart  from  capitalists,  has  no  share  in 
them.     In  all  this  there  is  nothing  new ;  it  is  simply  a 


"COMPETITION"  133 

paraphrase  by  Marx  of  a  passage  in  the  Systeme  des 
contradictions  Economiques,  by  Proudhon,i  the  fallacy  of 
which  is  obvious. 

Competition,  ignored  by  Marx,  is  the  cause  of  the 
astonishing  reduction  of  prices  which  this  age  has  seen. 
The  present  prices  of  iron,  coal,  steel,  and  cotton,  supply  a 
striking  illustration  of  the  beneficent  operation  of  this 
economical  phenomenon,  and  prove  that  neither  the 
capitalist  nor  the  manufacturer  can  appropriate  the  benefit 
of  the  excess  of  productivity  of  co-operative  labour.  The 
principal  element  of  profit  is,  however,  of  a  quite  different 
character.  Society,  as  Marx  sees,  pays  a  price  for  com- 
modities, which  represents  the  average  net  cost  of  produc- 
tion ;  it  may  be  said  that  the  price  paid  is  that  which 
is  high  enough  to  secure  the  adequate  supply  of  the 
market,  and  therefore  the  chief  element  of  industrial  profit 
is  the  ability  of  a  manufacturer  to  reduce  the  net  cost  of 
his  own  goods  below  that  of  the  produce  of  his  competitors. 
Thus,  the  manufacturer  looks  for  a  market  where  he  can 
obtain  his  raw  material  at  less  than  the  average  price,  and 
seeks  for  the  best  arrangements  for  economising  labour, 
and  for  chemical  or  mechanical  processes  which  will 
facilitate  production  or  will  improve  the  quality  of  his 
products;  he  must,  in  fact,  be  always  on  the  alert,  and 
upon  this  condition  alone  can  he  acquire  a  fortune.  It  is 
only  just,  that  if  a  manufacturer  by  his  ability,  energy,  and 
enterprise,  succeeds  in  reducing  the  cost  of  production,  he 
should  receive  the  recompense  due  for  his  useful  inventions 
and  intelligent  organisation.  But  as  has  been  pointed 
out,  he  can  only  retain  possession  of  the  profit  temporarily  ; 
rivals  watch  each  step  of  those  with  whom  they  are  com- 
peting, and  as  soon  as  a  manufacturer  succeeds  in 
diminishing  the  cost  of  production,  the  attention  of  his 
competitors  is  at  once  aroused,  and  they  give  themselves  no 
rest  until  they  have  discovered  the  secret  of  his  success; 
experience  shows  that  they  are  invariably  successful,  that 
improved  methods  and  new  processes  cannot  be  kept 
secret,  and  that  success  cannot  remain  long  concealed. 
^  4th  ed.,  vol.  i.,  p.  243. 


134  HOURS  OF  LABOUR 

The  effect,  therefore,  of  competition,  and  of  the  diminu- 
tion of  price  which  is  caused  by  it,  is  to  confer  upon 
society  as  a  whole  the  ultimate  benefit  of  all  discoveries 
and  industrial  improvements. 

Thus  we  see  that  Marx'  theory  falls  like  a  house  of 
cards ;  it  is  in  vain  that  he  attempts  to  strengthen  it  by 
dissertations  upon  the  constant  pressure  exerted  by 
capital  in  order  to  add  to  the  length  of  the  work-day,  upon 
the  increase  of  children's  and  women's  labour,  upon  the 
industrial  crises  brought  about  by  machinery,  and  upon 
the  greater  intensity  of  labour,  which  is  the  result  of,  and 
to  some  extent  a  compensation  for,  the  reduction  of  the 
work-day.  What  is  said  by  him  upon  these  subjects  is 
instructive  and  interesting,  but  full  of  exaggeration,  and 
he  omits  to  notice  or  make  allowance  for  the  fact  that 
when  he  wrote,  society  had  barely  emerged  from  the 
chaotic  period  which  accompanied  the  development  of 
industry  upon  a  large  scale. 

So  far,  it  is  the  dogmatic  side  of  Marx'  theory  that 
has  been  dealt  with ;  it  is  now  proposed  to  consider  that 
part  of  his  book  in  which  he  treats  of  what  according  to 
him  are  the  necessary  consequences  of  a  capitalist 
organisation  of  production,  such  as  the  use  of  machinery 
for  every  kind  of  manufacture,  the  servitude  of  labourers 
who,  in  place  of  employing  their  labour-force  for  themselves, 
are  compelled  to  hire  it  out,  and  finally  the  genesis  and 
growth  of  "profit"  assisted  by  these  conditions.  Capita- 
lists, he  asserts,  incessantly  strive  to  increase  the  "  corvee," 
or  unpaid  labour ;  their  efforts  take  various  forms ;  the 
first  and  best  known  is  the  prolongation  of  the  work-day. 
On  this  point,  complaints  have  been  made  for  many  years, 
by  economists  and  moralists.  Days  of  fourteen  or  fifteen, 
sometimes  even  of  sixteen  or  seventeen  hours  of  actual 
work  are,  they  say,  to  be  met  with,  the  former  frequently, 
the  latter  exceptionally.  Nowadays,  however,  the  work- 
day has  been  compulsorily  reduced  (following  the  lead 
set  by  Switzerland  in  1877)  to  a  maximum  of  eleven 
hours  in  factories  where  women  and  children  are  employed, 
or,  even  as  in  France  since  1904,  to  ten  hours.     In  England 


GENESIS  OF  TRADES-UNIONISM  135 

the  hours  have  fallen  to  fifty-six  per  week,  and  in  the 
future,  as  industrial  methods  are  still  further  perfected,  a 
still  larger  reduction  may  become  possible.^ 

The  long  work-days  were,  and  are,  so  far  as  they  still 
exist,  an  incident  of  the  chaotic  industrial  condition 
attending  the  conversion  of  industries  on  a  small  scale,  to 
industries  on  a  large  scale,  and  are  merely  a  transitory 
phenomenon  which  has  either  already  disappeared,  or  is  in 
process  of  disappearing,  owing  largely  to  the  pressure  of 
the  collective  action  of  workmen,  which  in  the  smaller 
French  industries  has  already  secured  a  reduction  of  the 
work-day  to  ten  and  even  in  some  cases  to  nine  hours,  and 
which  will  be  equally  successful,  although  perhaps  more 
slowly,  in  the  larger  industries.  Marx  ignores  this  force, 
which  is  already  powerful,  and  growing  more  so  every 
day.  When  wage  earners,  as  a  consequence  of  labour  co- 
operation, were  collected  in  large  numbers,  meeting  every 
day,  exchanging  ideas,  and  becoming  well  acquainted,  they 
soon  learnt  the  advantage  of  association  and  con- 
certed action.  In  time,  and  despite  hostile  laws,  they 
established  themselves  as  a  collective  force  of  infinitely 
greater  power  than  that  which  they  could  exert  as  isolated 
individuals.  The  observations  made  by  Marx  upon  the 
superiority  of  collective  to  individual  labour,  are  equally 
applicable  to  these  associations.  Although  it  is  obvious 
that  this  force  may  come  to  be  a  source  of  danger  to 
society,  its  legitimacy  cannot  be  denied,  but  it  is  to  be 
hoped  that  its  use  will  be  regulated  with  prudence  and 
good  sense.  One  circumstance  which  has  greatly  assisted 
its  growth,  has  been  the  increase  of  wages  compared  with 
the  cost  of  living,  which  has  made  it  possible  for  workmen 
to  set  aside  a  part  of  their  wages  as  a  reserve  in  case  of 
conflict  with  their  employers,  or  as  a  means  of  assisting 
workmen  of  other  industries  who  are  on  strike.  If,  on  the 
one  hand,  wage  earners  have  often  used  their  weapon, 
the  "  strike,"  without  any  reasonable  cause,  on  the  other, 

*  See  L'J&tat  modeme  et  ses  fongtions^  book  vi.,  chapter  iv.,  by 
P.  Leroy  Beaulieu  ;  and  also,  Traitc  Thiorique  et  pratique  d'^conomie 
politique,  vol.  iv.,  pp.  297-310,  by  the  same  author. 


136      STRIKES  DO  NOT  INDICATE  DISTRESS 

economists  generally  have  taken  a  superficial  and  one- 
sided view  of  the  efficacy  of  their  action.  Taking  every- 
thing into  consideration,  "  strikes  "  have  helped  to  improve 
the  condition  of  wage-earning  classes,  and  have  not  only 
been  the  means  of  obtaining  higher  wages,  or  shorter 
work-days,  but  have  also  increased  the  independence  and 
the  dignity  of  the  manual  labourer,  and  have  raised  him  in 
the  estimation  of  his  employer.^  If  the  number  of  strikes 
in  any  country  is  large,  it  is  an  indication  that  the  wages 
paid  are  such  as  to  provide  an  excess  over  the  cost  of 
living,  since  if  this  were  not  the  case,  especially  in  countries 
where  there  is  no  poor  law,  they  would  be  impossible. 
The  well-known  saying  of  Adam  Smith,  that  without 
employment  the  wage  earner  could  not  exist  for  a  week, 
has  been  more  and  more  falsified  by  facts.  Thus,  notwith- 
standing the  social,  economical,  and  political  evils  by  which 
they  are  accompanied,  "strikes"  indicate  an  ameliorated 
condition  of  wage  earners,  especially  when  they  are  the 
result  of  organisation,  and  not  merely  an  outbreak  of 
despair.  For  instance,  "strikes"  in  which  the  wage 
earners  assume  the  offensive,  and  attack  their  employers 
or  consumers,  in  order  to  secure  more  advantageous 
conditions,  possess  this  character  to  a  marked  degree. 
It  is  therefore  a  mistake  to  assume  that  a  large  number 
of  strikes  is  any  indication  of  extreme  distress. 

Other  conditions  have  also  contributed  to  the  reduction 
of  the  work-day  :  such  as  the  spirit  of  philanthropy,  now 
so  widely  prevalent,  and  the  more  kindly  attitude  adopted 
towards  wage  earners,  both  in  social  and  official  circles. 
The  intervention  of  the  legislature,  whether  in  the  interest 
of  adults,  as  in  France  or  Switzerland,  or  of  women  and 
children  only,  as  in  England,  has  directly  or  indirectly 
conduced  to  the  same  result.^  Work  hours  in  the  large 
industries  in  England  have  been  reduced  to  56  hours  a 
week.     If  9  hours  a  day  out  of  the  168  hours  in  the  week 

^  See  Repartition  des  richesses,  P.  Leroy  Beaulieu,  chap.  xiv.  [See 
also,  Criticism  of  the  Theory  of  Trade  Unions,  by  J.  S.  Cree,  Liberty  and 
Property  Defence  League,  25  Victoria  Street,  London,  S.W.] 

*  See  L'Etat  fnoderne  et  sesfon^tions,  P.  Leroy  Beaulieu. 


FAMILY  EARNINGS  137 

are  allowed  for  sleep  and  meals,  there  will  remain  105 
hours,  so  that  labour  occupies  little  more  than  half  the 
hours  remaining  after  bodily  wants  are  provided  for. 
In  Paris,  during  the  years  of  prosperity,  1871  to  1881, 
workmen,  whose  wages  amounted  to  from  7  to  14  or  15  fr. 
a  day,  frequently  took  two  or  three  days  holiday  a  week — 
a  license  quite  as  prejudicial  to  their  moral  and  physical 
well-being  as  excessive  hours  of  labour.  When  these  facts 
are  considered,  it  becomes  evident  that  Marx'  thesis  is 
incorrect,  and  that  what  is  termed  capitalistic  production 
does  not  involve  a  continually  increasing  burden  of  work 
hours.  Excess  in  this  direction  is  no  longer  to  be  found 
in  large  factories,  and  is  hardly  to  be  met  with  anywhere 
except  in  those  industries  which  are  the  least  affected  by 
capitalistic  organisation,  and  in  some  of  the  smaller 
industries,  especially  when  the  work  is  done  at  home. 
That  heart-rending  poem  of  the  "  Song  of  the  Shirt " 
describes  conditions  which  no  longer  exist  in  production 
on  a  large  scale.^ 

Although  unable  to  disprove  the  evidence  on  this 
point,  Marx  does  not  abandon  his  thesis.  Capitalists,  he 
says,  greedy  for  profit,  have  other  methods,  more  efficacious 
and  insidious  than  the  increase  of  the  hours  of  work,  for 
extracting  gratuitous  labour  from  their  workmen :  one 
of  these  is  first  to  replace  skilled  by  unskilled  workmen, 
and  then  to  substitute  women  and  children  for  the  latter. 
Owing  to  the  introduction  of  machinery,  this  continual 
lowering  of  the  personal  quality  of  workers  can  be  effected, 
not  only  without  loss,  but  with  great  advantage  to  the 
capitalist.  Such  a  substitution  is  obviously  detrimental  to 
wage  earners.  Formerly  the  workman  had  to  support  his 
whole  family,  and  this  consideration  governed  the  wages  it 
was  necessary  to  pay  him  ;  but  to-day,  when  his  wife  and 
elder  children  go  to  work,  it  is  possible  for  him  to  accept 
half  of  his  former  wages.  Thus,  when  all  the  members  of  a 
family  work,  their  collective  earnings  may  not  exceed  the 
amount  formerly  received  by  the  head  of  the  family,  when 

*  See     Le    travail   dcs  femmes    au    XIX''^    sitcle,    P.    Leroy 
Beaulieu. 


138    EFFECT  OF  ECONOMY  IN  PRODUCTION 

he  alone  worked,  with  the  result  of  increased  toil,  and 
greater  physical  and  moral  strain,  without  any  improve- 
ment of  condition.  Another  reason  which  Marx,  in  common 
with  both  theoretical  and  practical  socialists,  gives  as  an 
explanation  why  men  are  prejudicially  affected  by  women's 
labour  is,  that  the  cost  of  subsistence  is  less  for  a  woman 
than  for  a  man,  and  therefore,  when  an  industry  is  open 
to  both  men  and  women,  the  wages  of  the  former  have  a 
tendency  to  fall,  and  it  becomes  possible  for  capitalists,  by 
substituting  women  for  men,  to  reduce  their  wage  bill  and 
increase  their  profit. 

So  far  as  regards  the  profit,  it  has  already  been  shown 
that  the  ultimate  effect  of  economy  in  production  is  not  to 
increase  profit,  but  to  lower  prices.  The  first  manufacturer 
who  availed  himself  of  women's  and  children's  labour,  might 
no  doubt  secure  a  larger  profit  for  a  time,  but  very  soon 
his  competitors  would  follow  his  example,  and  his 
temporary  advantage  would  disappear. 

Considered  as  a  whole,  Marx'  reasoning  is  tainted  by 
inaccuracy  and  exaggeration.  Is  it  to  be  supposed  that 
women  and  children  did  not  work  at  all  before  machinery 
and  co-operative  industry  were  introduced  ?  So  far  from 
this  being  the  case,  we  know  that  the  burden  of  labour 
borne  by  women  under  old  civilisations  and  amongst 
primitive  nations  was  a  terrible  one ;  they  laboured  on 
the  soil,  collected  fuel,  carried  burdens,  and  acted  as 
builders'  labourers,  and  they  did  all  the  spinning  and 
weaving.  It  is  one  of  the  foolish  hallucinations  of  this 
age  to  believe  that  it  can  modify,  not  only  the  visible 
manifestation,  but  the  very  nature  of  things. 

When  the  system  of  small  home  industries  prevailed, 
the  labour  of  both  women  and  children  was  excessive ;  and 
the  assertion,  that  when  all  the  members  of  a  family  work, 
their  combined  earnings  are  not  greater  than  those  that 
would  be  received  by  the  father  alone,  is  untrue.  Facts 
show  that,  on  the  contrary,  the  wages  of  heads  of  families 
have  risen  considerably  in  the  majority  of  industries 
during  the  last  sixty  years.^ 

*  See   Rdpartition  des  richesses,    P.    Leroy   Beaulieu ;   also   the 


FEMALE  LABOUR  139 

The  wages  earned  by  a  man  always  tend  to  be  deter- 
mined by  his  capability ;  but  supposing  it  to  be  true, 
which  it  is  not,  that  the  competition  of  women  and  children 
caused  the  wages  of  men  to  remain  stationary,  or  to 
decrease,  even  then  the  family  would  derive  a  profit  from 
their  collective  work.  If  three  or  four  millions  of  human 
beings  in  a  nation  of  thirty  or  forty  millions  become 
producers  as  well  as  consumers,  it  is  evident  that  the  total 
produce  will  be  proportionately  increased,  and  since  the 
total  number  of  consumers  is  unaltered,  the  price  of  com- 
modities must  fall.  The  actual  wages,  therefore,  are 
potentially  larger,  although  the  nominal  amount  may 
remain  the  same.  The  extent  to  which  this  substitution 
of  female  for  male  labour  has  been  effected  is  also  much 
exaggerated.  In  many  cases  the  change  has  been  in  the 
contrary  direction.  Spinning  was  an  entirely  feminine 
occupation  before  the  advent  of  machinery,  but  it  is  so 
no  longer :  men  have  been  substituted  for  women  to  a 
considerable  extent  in  this  industry.  It  is  the  same  in 
the  case  of  laundry  work ;  and  if  women  now  have  a  share 
in  the  work  of  weaving  and  printing,  they  have  been 
replaced  by  men  in  most  hotels  and  in  the  larger  shops. 
Again,  industries  employing  exclusively  male  labour,  such 
as  mines,  metal-work,  and  railways,  have  increased  to  a 
surprising  extent,  and  the  present  difficulty  is  not  so  much 
the  competition  of  women  with  men  in  the  labour  market, 
as  to  find  suitable  occupation  for  them. 

Marx'  statement  is,  therefore,  contrary  to  fact,  and  his 
assertion  that  in  England  the  number  of  women  workers 
increases  more  rapidly  than  that  of  men  is  ridiculous. 

It  is  unnecessary  to  dwell  upon  the  laws  relating  to  the 
labour  of  women  and  children,  which,  to  a  certain  extent, 
have  restricted  the  substitution  of  manual  labour  of  women 
and  children  for  that  of  men.^  The  prohibition  of  factory 
researches  of  Leone  Levi  and  Giffen,  summarised  in  the  Bulletin  de 
Statistique  for  February  and  March  1884,  and  the  Bordereaux  de 
Salaires  en  1900-1901,  with  retrospective  tables  published  by  the 
"  Office  du  travail."    [See  also,  note  on  p.  24.] 

*  See  Le  travail  des  femmes  au  XIX'^^  sikle,  P.  Leroy 
Ueaulieu. 


140  "SPEEDING-UP" 

work  for  children  under  12  years,  and  the  limitation  of 
hours  of  work  to  six  for  those  between  the  ages  of  12 
and  16  and  18,  deserve  approval.  With  regard  to 
adult  women,  it  is  maintained  that,  as  child-bearers, 
both  their  own  and  their  infants'  health  would  be  pre- 
judiced by  excessive  labour ;  and,  therefore,  that  the  state 
is  not  exceeding  its  proper  function  by  prohibiting  night 
work  altogether  and  restricting  their  work-day  to  ten  or, 
at  the  most,  eleven  hours ;  it  may  be  maintained  also  that 
this  intervention  is  not  arbitrary,  but  absolutely  necessary 
for  the  protection  of  beings  incapable  of  defence. 

Again,  Marx  declares  that  capitalists,  finding  themselves 
foiled  by  legislation  and  by  the  menace  of  strikes,  in  their 
attempts  to  increase  the  work-day  to  more  than  ten  or 
twelve  hours,  adopted  another  course,  and,  availing  them- 
selves of  the  acceleration  of  the  rate  of  work  made  possible 
by  machinery,  they  increased  the  amount  of  work  done  in 
a  given  time,  and  were  thus  able  to  make  one  man  do  the 
work  of  several.  This  "  speeding-up,"  which  at  first  sight 
appears  to  be  an  improvement  in  industrial  economy,  was 
welcomed  by  the  more  thoughtless  economists,  but  was 
regarded  with  misgiving  and  regret  by  philanthropists  and 
hygienists.  Marx'  observations  upon  the  increasing 
pressure  of  labour  arising  from  this  cause  constitute  the 
weightiest  part  of  his  criticism  ;  this  phenomenon,  indeed, 
is  not  altogether  a  satisfactory  one,  and  superficial 
observers  may  well  be  deceived  as  to  its  real  significance. 
There  can  be  no  doubt  that  the  intensity,  as  well  as  the 
actual  duration  of  work,  ought  to  be  taken  into  account, 
and  a  work-day  of  nine  or  ten  hours  may  be  quite  as 
exhausting  as  one  of  twelve. 

This  tendency  of  modern  industry  is  distressing,  but  it 
can  be  modified  or  arrested.  Legislation  can  do  something 
towards  this  end,  although  its  sphere  of  legitimate  action 
is  limited ;  still,  without  undue  interference,  it  can  enforce 
precautions  against  accidents,  and  make  employers  who 
fail  to  provide  necessary  safeguards,  responsible  for  the 
consequences  of  their  neglect.  Again,  adult  workmen, 
who  are  now  educated,  and  who  in  most  countries  have 


CREATION  OF  "UNEMPLOYED"  141 

the  right  of  association  and  collective  action,  are  themselves 
in  a  position  to  stipulate  that  the  stress  of  work  shall  not 
be  so  great  as  to  throw  an  undue  strain  upon  vitality,  and 
by  their  collective  action  they  are  able  to  enforce  com- 
pliance with  reasonable  demands.  It  seems,  therefore, 
that  the  injury  caused  by  intensity  of  labour  is  an  evil 
which  can  be  adequately  guarded  against. 

Although  Marx'  criticism  in  this  instance  is  to  some 
extent  justifiable,  it  does  not  assist  in  proving  his  thesis 
that  profit  is  unpaid  labour.  Increased  intensity  cannot, 
any  more  than  increased  duration  of  labour,  add  per- 
manently to  industrial  profit.  So  long  as  the  "  speeding- 
up  "  is  confined  to  one  factory,  its  proprietor  will  secure 
the  profit  arising  from  it,  but  competition  will  soon  lead  to 
a  reduction  of  price  proportionate  to  the  increased  profit- 
gain  thus  obtained.  It  cannot,  therefore,  be  permanent, 
but  like  all  advantages  arising  from  industrial  improve- 
ments, it  will  ultimately  enure  to  the  exclusive  benefit  of 
consumers. 

The  last,  and  one  of  the  gravest  charges  made  by 
Marx  against  the  capitalistic  system  of  production  is,  that 
it  has  a  tendency  to  create  a  permanent  excess  of  wage 
earners,  and  that  modern  society  is  therefore  always  over- 
burdened with  the  "  unemployed."  History  shows  that 
this  phenomenon  is  not  peculiar  to  modern  times.  The 
descriptions  of  contemporary  chroniclers,  the  numerous 
laws  relating  to  the  subject,  and  the  institution  of  the 
English  poor  law  during  Elizabeth's  reign,  show  that  a 
class  outside  of,  and  incapable  of  incorporation  with,  the 
industrial  life  of  society  existed  in  former  times,  and 
notwithstanding  Schaffle's  encomiums  upon  the  "solid 
social  organisation  of  the  middle  ages,"  workless  vaga- 
bonds and  beggars  abounded  under  that  economic  system. 
By  the  rules  which  limited  the  number  of  members  of 
professions  and  guilds,  and  by  the  regulations  in  respect 
of  "maitrise"  ("freemen's  rights  and  privileges")  and 
apprenticeship,  industry  was  at  that  time  organised  in 
water-tight  compartments,  and  large  numbers  of  men 
were  in  consequence  unable  to  obtain  employment. 


142  THE  "WAGE-FUND^ 

It  will  be  well  to  examine  the  grounds  upon  which 
Marx  bases  his  assertion  that  an  essential  characteristic 
of  capitalistic  production  is  the  creation  of  an  always 
excessive  number  of  workers,  and  consequently  of  "  un- 
employment." This  proposition  is  connected  with  his 
definition  of  capital,  which,  it  will  be  remembered,  he 
divides  into  "  constant "  and  '*  variable."  ^  Capital  of  both 
kinds  is,  he  says,  always  increasing.  The  increase  is, 
however,  far  more  rapid  in  the  case  of  "  constant "  than 
in  that  of  "  variable  "  capital.  This  is  true,  but  the  terms 
in  which  the  division  of  capital  is  usually  described  are 
"  fixed "  and  "  circulating,"  in  place  of  "  constant "  and 
"  variable,"  and  are  not  precisely  equivalent  to  those  used 
by  Marx.  The  amount  of  "  fixed  "  capital  it  possesses  is 
a  measure  of  the  importance  of  a  civilised  nation,  and  the 
increase  of  "fixed,"  or,  to  use  Marx'  term,  "constant," 
capital  is  of  the  greatest  advantage  to  society  in  general, 
and  more  especially  to  the  wage  earners.  The  fact  that 
people  of  all  classes  are  now  better  clothed,  and  have  better 
furnished  houses  than  formerly,  is  due  to  this  cause ;  but 
notwithstanding  this  obvious  truth,  Marx  comes  to  the 
conclusion  that  the  result  of  the  more  rapid  increase  of 
"  constant "  or  "  fixed,"  in  comparison  with  "  variable  " 
or  "circulating"  capital,  is  to  cause  a  surplus  of  wage 
earners. 

Here,  again,  is  one  of  those  numerous  statements,  the 
truth  of  which  collectivists  find  it  necessary  to  assume,  but 
for  which  there  is  no  evidence.  "  Circulating  "  capital,  in 
all  civilised  countries,  also  has  a  tendency  to  grow  at  a 
greater  rate  than  the  population.  The  population  of 
France  has  not  increased  by  more  than  about  a  quarter  in 
half  a  century,  whilst  the  money  paid  as  wages  has  almost 
doubled  during  that  period.  This  thesis  of  Marx  is  in 
reality  nothing  more  than  a  repetition  of  the  fallacy  of 
some  English  economists  of  high  repute,  who  believed  in 
the  existence  of  a  "  wage-fund  "  or  definite  sum  from  which 
the  wages  paid  for  manual  labourers  is  derived ;  no  such 
fund,  however,  exists.  The  remuneration  of  wage  earners 
'  See  ante,  p.  25. 


INTRODUCTION  OF  MACHINERY  143 

is  in  reality  provided  for  by  the  produce  of  the  manufacture 
upon  which  they  are  engaged  at  the  time ;  and  it  is  in 
reliance  upon  its  selling  value  that  wages  are  paid  before 
the  produce  can  be  sold ;  but  the  sum  required  for  wages, 
which  depends  upon  many  varying  causes,  can  never  be 
ascertained  beforehand  with  any  accuracy ;  and  the  idea 
that  at  any  moment  a  definite  amount — distinguished  by 
Marx  as  "variable"  capital,  and  by  MacCulloch  and 
Stuart  Mill  as  a  "  wage-fund" — exists  for  their  payment,  is 
a  delusion. 

The  theory  of  the  surplus  "  unemployed  "  population  is 
founded  by  Marx  upon  the  fact  that  manual  labour  is 
constantly  displaced  by  machinery.  The  capitalist  is  no 
doubt  always  endeavouring  to  economise  manual  labour 
by  the  use  of  machines :  but  this  economy  does  not 
necessarily  involve  unemployment;  it  is  true  that  for  a 
time  it  may  have  this  result,  with  all  their  advantages, 
machines,  when  first  introduced,  must  necessarily  disturb 
the  labour  market :  provisionally  at  least,  they  must  cause  a 
certain  number  of  men  to  be  thrown  out  of  work,  and  the 
attention  of  economists  and  philanthropists  has  long  been 
directed  to  this  momentous  question.  The  displacement 
of  labour  caused  by  machinery  cannot  be  denied ;  but  its 
effect  has  been  grossly  exaggerated,  and  is  far  less  serious 
now  than  when  machines  first  came  into  general  use  in 
the  early  part  of  the  nineteenth  century.  The  derange- 
ment caused  at  the  present  time  is  not  so  sudden,  so 
violent,  or  so  complete,  as  it  then  was,  because  the  use  of 
machinery  in  civilised  countries  is  now  universal,  and  the 
conflict  is  now  no  longer  between  machines  and  the 
defenceless  labourer,  but  between  the  new  and  the  older 
forms  of  machinery.  A  machine,  even  if  slightly  inferior,  is 
not  readily  abandoned.  The  change  is  therefore  made 
slowly,  and  allows  time  for  the  readjustment  of  labour  to 
meet  the  new  conditions.  The  wage-earning  population  is 
now  more  intelligent,  and  no  longer  offers  a  blind  opposi- 
tion to  the  introduction  of  new  machinery ;  quicker  and 
cheaper  means  of  locomotion  facilitate  the  migration  of 
labour  from  congested  districts  to  others  where  labour  is 


144  EVIL  A  TEMPORARY  ONE 

in  demand  ;  and  although  new  and  improved  machines  are 
constantly  being  substituted  for  obsolete  ones,  there  has 
been  no  repetition  of  the  serious  and  persistent  troubles 
which  at  first  accompanied  the  change  from  hand-labour 
to  machinery  in  the  textile  industries  of  France  and 
England. 

Proudhon  anticipated  Marx  in  giving  a  highly  coloured 
picture  of  the  evils  caused  by  the  introduction  of  machinery, 
which  he  describes  as  a  national  scourge  comparable  to  an 
outbreak  of  cholera  !  If  this  comparison  were  to  be  taken 
seriously,  it  might  be  pointed  out  that  even  visitations  of 
cholera  are  far  less  virulent  now  than  formerly,  since  men 
have  learnt  how  to  mitigate  the  severity  of  the  visitation. 
Thus,  although  it  cannot  be  denied  that  serious  dis- 
organisation of  labour  was  caused  by  the  sudden  intro- 
duction of  machinery,  this  evil  effect  was  only  temporary, 
and  under  the  changed  conditions  of  the  present  day, 
the  disturbance  caused  by  new  machinery  is  comparatively 
small. 

Proudhon  refers  to  the  supersession  of  sailing  ships  by 
steam  navigation,  as  an  instance  of  the  disturbance  of 
labour.  No  doubt  this  was  a  change  which  proceeded  with 
great  rapidity ;  nevertheless  sailing  ships  did  not  suddenly 
disappear :  the  number  built  was  reduced,  but  fifty  years 
after  the  advent  of  steam  navigation,  sailing  ships  still 
continued  to  give  employment  to  large  numbers  of  men. 
Statistics  show  that  in  England,  in  1877,  17,101  sailing 
ships,  with  a  total  tonnage  of  4,138,149,  employed  123,563 
men,  and  in  1899  the  corresponding  figures  were  7899 
ships,  2,117,975  tons,  and  54,333  men.  The  number  of 
steamships  in  1877  was  3218,  with  a  total  tonnage  of 
1,977,489,  and  the  number  of  men  72,999;  in  1899  the 
number  was  7298,  the  total  tonnage  7,123,639,  and  the 
men  189,802.^  From  these  figures  it  is  clear  that  although 
the  period  referred  to  is  that  of  the  most  rapid  develop- 
ment of  steam  navigation,  the  change,  although  rapid,  was 

^  See  Annual  Statement  of  the  Navigation  and  Shipping  of  the 
United  Kingdom  for  the  year  188 1,  p.  265;  and  Statistical  Abstract 
for  1899,  p.  179. 


PROTECTOR  OF  WAGE  EARNERS    145 

not  abrupt :  sailing  ships  did  not  at  once  disappear,  and 
sailors  were  not  suddenly  thrown  out  of  employment.  A 
further  reference  to  statistics  shows  that  in  the  four  years, 
1877-81,  there  was  a  reduction  of  only  21,000  men  em- 
ployed in  sailing  ships — rather  less  than  one-fifth  of  the 
whole  number — whilst  on  steamships  the  number  increased 
during  the  same  period  by  17,500,  so  that  during  these 
years  when  the  process  of  transformation  was  most  rapid, 
the  total  number  of  men  employed  on  the  trading  fleet  of 
Great  Britain  was  reduced  from  196,562  to  192,903  in  four 
years — that  is,  by  only  3659  men.  The  effect  would  be 
that  a  smaller  number  of  lads  would  become  sailors,  and 
some  hundreds  of  aged  sailors  would  have  given  up 
a  sea-going  life  for  service  on  land,  at  a  rather  earlier  age 
than  would  otherwise  have  been  the  case.  Thus,  in  this 
instance  a  great  industrial  revolution  was  accomplished 
with  a  quite  insignificant  disturbance  of  labour ;  and  this 
has  now  become  the  general  rule.  New  machinery  is 
introduced  without  necessarily  crushing  human  beings  in 
the  process.  Temporary  inconvenience  may  be  suffered, 
and  men  may  be  rudely  awakened  from  habits  of  routine  or 
indolence,  but  severe  or  permanent  evil  is  no  longer  caused 
by  the  change. 

Marx,  Proudhon,  and  their  fellow-critics  have  failed  to 
perceive  that  capital  is  in  reality  the  guardian  and  pro- 
tector of  the  wage-earning  population.  It  is  capital, 
represented  by  the  older  machines,  which,  in  defending 
itself  against  displacement  by  newer  machinery,  is  at  the 
same  time  protecting  the  workmen.  It  must  also  be 
remembered  that  the  replacement  of  obsolete  by  improved 
machinery,  is  not  the  only  method  by  which  fixed  capital 
is  augmented ;  it  is  also  increased  by  additions  to  the 
number  of  the  machines  in  use ;  and  thus  the  effect  of  the 
growth  of  fixed  capital,  is  to  increase,  and  not  to  diminish, 
the  demand  for  labour ;  but  although  this  is  a  fact,  the  use 
sometimes  made  of  it  by  economists  is  open  to  criticism. 
Dunoyer  proved  much  less  than  he  imagined,  when  he 
stated  that  the  population  of  the  Duchy  of  Lancaster, 
which  was  only   200,000  in    1750,  and   672,000  in    1801, 

K 


146  THE  INDUSTRIAL  "RESERVE  *' 

increased  to  1,336,000  in  183 1,  and  that  1,511,000  persons 
were  employed  in  the  cotton  industry,  as  against  40,000 
before  the  advent  of  machinery.  The  difficulty  of  making 
an  accurate  statement  of  numbers  in  such  a  case  is  great ; 
but  besides  this,  the  enormous  development  of  this  industry 
was  in  reality  due  to  the  fact  that  Great  Britain  supplied 
the  whole  world  with  cotton  goods ;  and  this  exceptional 
circumstance  destroys  the  validity  of  Dunoyer's  deductions. 

"  Economists  are  in  error,"  says  Proudhon,  "  when  they 
assert  in  an  absolute  way  that  simplification  of  the  process 
of  manufacture  never  has  the  effect  of  reducing  the  number 
of  men  employed  in  any  particular  trade."  But  prudent 
economists  do  not  commit  themselves  to  so  rash  a  state- 
ment ;  what  they  contend — and  experience  has  justified 
their  contention — is,  that  in  all  branches  of  industry, 
machines,  by  increasing  production,  diminish  the  cost  of 
commodities ;  that  this,  again,  induces  an  increased  demand ; 
and  therefore,  when  a  discovery  which  effects  an  economy 
in  the  production  of  any  particular  commodity  is  brought 
into  use,  the  probability  is  that  the  number  of  workmen 
employed  will  not  be  less  than  before,  and  that  ultimately 
it  will  be  greater.  One  of  the  causes  which  retards  the 
introduction  of  new  machinery,  and  in  this  way  mitigates 
the  disturbance  attending  it,  is  the  existence  of  patent 
rights,  the  effect  of  which  is  to  prolong  the  use  of  obsolete 
processes. 

The  perennial  surplus  of  "  unemployed,"  irrespective  of 
malefactors  and  of  the  sick  and  incapable,  has,  in  truth,  no 
permanent  existence,  except  in  the  imagination  of  Marx 
and  his  disciples.  This  imaginary  surplus,  condemned  to 
sloth  and  want,  is  called  by  Marx  the  reserve,  in  contra- 
distinction to  the  active,  portion  of  the  industrial  army,  and 
he  declares  that  for  capitalistic  production  the  existence  of 
this  reserve  is  an  absolute  necessity.  Facts,  however,  in  no 
way  support  such  an  assertion  ;  if  anything  is  certain,  it  is 
that  the  displacement  of  workmen  and  unemployment  is 
most  frequent  in  those  industries  which  are  not  organised 
upon  a  capitalistic  system  ;  it  is  small  industries  and  home 
work  that  suffer  most  from  this  cause.     The  capitalist  is 


NOMADIC  LABOUR  147 

under  compulsion  to  maintain  his  works  and  to  preserve 
his  market ;  he  will  therefore  continue  to  work  for  a  long 
time  even  at  a  loss,  and  his  machines  will  only  be  stopped 
in  the  last  extremity.  In  this  way,  machines  are  a  protec- 
tion, in  times  of  industrial  crisis,  to  the  workmen  employed 
upon  them,  whilst  the  workman  who  stands  alone  is  at  the 
mercy  of  every  economic  disturbance,  every  change  of 
fashion,  or  slackening  of  demand ;  there  is  no  one  to 
intervene  between  him  and  disaster,  or  to  find  work  for 
him  when  his  usual  sources  of  employment  have  failed. 

Marx  brings  forward  some  not  very  happily  chosen 
instances  in  support  of  his  thesis :  he  enlarges  upon  what 
he  calls  "das  wander  volk,"  by  which  he  means  navvies 
employed  upon  railways,  etc.,  and  nomadic  labour,  such  as 
the  gangs  of  agricultural  labourers  in  England.  He  forgets 
that  in  these  cases  it  is  not  a  question  of  a  great  industry 
carried  on  by  means  of  machinery ;  work  such  as  that  to 
which  he  refers  is  generally  manual  labour  performed 
with  the  aid  of  the  simplest  tools,  such  as  the  pick,  the 
spade,  and  the  barrow ;  such  a  system  is  not  necessarily 
bad,  and  under  proper  management  need  have  no  ill- 
effects  upon  the  industrial  population.  The  same  may  be 
said  with  even  more  truth  of  those  seasonal  migrations 
of  agricultural  labour,  which  are  not  the  invention  of 
England  or  of  our  age,  but  are  as  old  as  humanity. 
Besides,  that  portion  of  the  population  which  thus 
migrates  in  search  of  work  is  not  a  part  of  that  un- 
employed surplus  to  which  Marx  refers :  it  is  neither 
workless  nor  wageless. 

The  assertion  that  the  conditions  of  modern  industry 
destroy  the  security  of  the  workman's  position  and  the 
permanence  of  employment,  is  exaggerated  and  made 
without  regard  to  facts  which  have  an  important  bearing 
upon  the  subject.  Contemporaneous  industry  provides 
many  callings  which  a  workman  may  pursue  with  an 
assurance  of  continuous  employment  and  of  a  provision 
for  his  old  age,  and  which  offer  him  the  chance  of 
obtaining  the  maximum  of  security  for  his  future  to 
which  humanity  can  attain.     The  fixed  employment,  such 


148  COMPULSORY  IDLENESS 

as  is  afforded  by  railway  and  insurance  companies,  great 
shops,  navigation  companies,  and  many  other  industrial 
organisations,  which  employ  workmen  and  clerks,  not  by 
the  day,  week,  month,  or  even  by  the  year,  but  for  life, 
gives  shelter  to  hundreds  of  thousands — indeed,  millions — 
of  those  called  proUtaires. 

When  attentively  examined,  the  gravamen  of  Marx' 
charges  disappears ;  they  are  applicable  only  to  conditions 
which  are  for  the  most  part  of  a  temporary  character, 
and  are  attributable  to  the  unavoidable  disturbance 
caused  by  the  transformation  of  small  into  great 
industries.  The  development  of  friendly  societies  and 
voluntary  insurance,  of  co-operation,  of  education,  and 
the  constant  extension  of  general  knowledge  of  the 
requirements,  and  the  opportunities  of  industrial  life,  will 
altogether  remove,  or  at  any  rate  greatly  modify,  these 
disadvantages. 

Marx'  statement,  that  pauperism  increases  pari  passu 
with  wealth,  which,  in  a  way,  is  a  summary  of  all  his 
assertions,  has  been  completely  disproved ;  he  dwells  at 
length  upon  the  subject,  and  attempts  to  show  that  the 
number  of  the  unemployed  and  the  development  of 
industrial  improvement  are  necessarily  correlated  pheno- 
mena. "  The  condemnation  of  one  section  of  the  wage- 
earning  class  to  compulsory  idleness,  as  a  consequence  of 
the  excessive  labour  performed  by  the  rest  of  that  class, 
and  vice-versd,  is  one  of  the  means  by  which  capitalists 
are  enriched,  and  which  at  the  same  time  hastens  the 
formation  of  the  industrial  army,  at  a  rate  proportionate 
to  that  of  the  social  accumulation  of  wealth.  How 
efficacious  this  cause  is  in  creating  a  surplus  of  labour  in 
relation  to  population,  is  shown,  amongst  other  nations, 
by  England,  where  the  technical  arrangements  for 
economising  labour  are  to  be  found  upon  a  colossal 
scale;  consequently,  if  the  amount  of  work  performed 
there  were  suddenly  to  be  restricted  within  reasonable 
limits,  and  were  graduated  for  the  different  classes  of 
workers  according  to  their  age  and  sex,  then  the  existing 
population   would  be  quite   insufficient   to  carry  on  the 


EFFECT  OF  DIMINISHED  PRODUCTION     149 

national  production  upon  the  present  scale.  The  great 
majority  of  those  now  unproductive  would  have  to  be 
converted  into  productive  labourers."^ 

This  course  of  reasoning  is  really  childish,  and  of  equal 
value  to  that  pursued  by  those  wage  earners  who  declare 
that  if  the  work-day  were  shortened  by  two  or  three  hours 
there  would  be  work  for  everybody !  Neither  they  nor 
Marx  appear  to  understand  that  if  this  were  done,  the 
price  of  commodities  would  increase,  sales  would  fall  off, 
or  be  restricted,  there  would  be  less  national  produce  to 
divide,  and  the  purchasing  power  of  wages  would  be 
diminished.  This  statement  does  not  imply  that  the 
length  of  the  present  work-day  and  the  rate  of  work  are 
unalterably  fixed,  but  only  directs  attention  to  the 
teaching  of  experience,  founded  upon  actual  fact,  which 
shows  that  any  artificial  action  by  which  the  duration 
and  rate  of  labour  is  suddenly  and  simultaneously  reduced 
throughout  a  country  must  have  the  effect  described, 
unless  counteracted  at  the  time  by  some  invention  which 
increases  the  amount  of  commodities  produced  in  a  given 
time. 

Marx  endeavours  to  uphold  his  so-called  "law,"  that 
the  capitalistic  accumulation  of  wealth  is  at  once  the  effect 
and  the  cause  of  a  surplus  population  of  labourers,  by 
numerous  examples.  Many  of  these  are  drawn  from  the 
industrial  history  of  England  for  the  period  1846  to  1866. 
Some  of  the  facts  he  quotes,  however,  which  relate  to 
overcrowding  and  the  displacement  of  labour,  have  no 
special  bearing  upon  the  thesis  under  discussion.  Without 
referring  to  these  facts  in  detail,  it  may  be  shown  from 
the  English  poor  law  statistics,  which  have  a  very  different 
value  from  that  of  the  disconnected  statements  made 
by  Marx,  that  this  so-called  "  law  "  is  non-existent.  The 
poor  law  returns  for  1849  show  that  in  that  year  there 
were  201,644  able-bodied  paupers  and  732,775  others, 
making  a  total  of  934,419,  the  population  of  England 
and   Wales   at   that   time  being  17,564,000;  in  the  year 

*  Das  Kapital,  pp.  661,  662. 


150  PAUPERISM  IN  ENGLAND 

1900  there  were  99,720  able-bodied  and  698,630  other 
paupers  in  a  population  of  32,091,407."  ^ 

An  examination  of  the  yearly  tables  of  pauperism 
shows  that  between  1849  and  1883  (34  years)  the  popula- 
tion of  England  increased  by  53  percent,  in  round  numbers, 
and  that  during  this  period  paupers  decreased  by  140  per 
cent;  from  1883  ^o  1900  pauperism  did  not  increase,  and 
the  numbers  for  the  years  1899  and  1900  are  far  below 
those  for  each  of  the  years  1849  to  1875.  When  com- 
pared with  population,  the  decrease  of  pauperism  is  even 
more  striking :  whilst  in  1883  the  pauperism  in  England 
and  Wales  was  3  per  cent  of  the  population,  in  1849  it 
was  5-1  per  cent,  and  in  the  following  years  it  continued  to 
be  about  5  per  cent ;  from  that  time  it  decreased  with 
almost,  although  not  quite,  complete  regularity.  In  the 
period  1877  to  1880,  there  was  a  slight  increase,  due  to 
general  slackness  of  trade ;  but  this  reaction  was  neither 
accentuated  nor  permanent,  and  in  1900  the  paupers 
represented  only  2-48  per  cent  of  the  population — a  lower 
rate  than  in  any  previous  period. 

The  foregoing  facts  not  only  give  a  categorical  and 
irrefutable  contradiction  to  Marx'  assertions,  but  they  also 
show  that  during  the  period  referred  to  the  proportion  of 
the  two  classes  of  paupers — the  able-bodied  and  the  not 
able-bodied — has  been  reversed.  In  1849  the  numbers  of 
able-bodied  paupers  was  201,000,  and  during  the  nine 
following  years  it  never  fell  below  126,000.  In  the 
decennial  period  i860  to  1869,  the  number  varied  between 
a  minimum  of  136,000  and  a  maximum  of  253,000;  from 
1874  to  1883,  from  a  minimum  of  92,000  to  a  maximum 
of  126,228  ;  from  1891  to  1900,  from  a  minimum  of  97,745  to 
a  maximum  of  116,478 — a  number  which  is  actually  less 
than  the  minimum  in  the  two  periods  1850  to  1859  and 
i860  to  1869 — whilst  in  the  meantime  the  population 
had  increased  by  60  per  cent 

If  it  is  sought  to  explain  the  decrease  in  the  numbers  of 
able-bodied  paupers  by  emigration,  it  must  be  remembered 

^  See  The  Financial  RefoTtn  Almanack,  1884,  pp.  114,  118  ;  also, 
The  Statistical  Abstract  in  1900,  pp.  250,  258. 


ABLE-BODIED  PAUPERS  151 

that  England  and  Wales  are  countries  of  immigration  and 
not  of  emigration. 

Apart  from  these  figures,  which  so  completely  destroy 
Marx'  thesis,  reason  and  experience  alone  would  suffice 
to  demonstrate  its  fallacy.  If  it  were  possible  to  find  out 
by  adequate  enquiry  the  real  circumstances  of  able-bodied 
paupers,  it  would  be  found  that  in  the  majority  of  cases 
they  are  due  to  some  personal  defect  of  character,  and  that 
this  class  is  outside  the  ranks  of  the  regular  army  of 
industry.  The  tendency  of  the  larger  industries,  at  a  time 
of  industrial  depression,  certainly  would  not  be  towards 
the  creation  of  a  surplus  of  unemployed,  seeing  that  it  is 
to  their  interest  to  avoid  a  complete  cessation  of  work ; 
and  in  place  of  discharging  their  men,  as  is  often  unavoid- 
able in  the  case  of  small  industries,  their  practice  is  to 
reduce  either  the  number  of  hours  worked  or  the 
number  of  work  -  days  in  the  week :  and  in  this  way 
absolute  want  is  averted,  even  during  a  severe  crisis,  for 
the  generality  of  workmen,  although  their  wages  may  be 
reduced. 

Speaking  generally,  therefore,  the  organisation  of 
industry  upon  a  large  scale  constitutes  a  defence  against 
the  evils  of  unemployment ;  and  with  regard  to  smaller 
industries,  the  statistics  of  pauperism  for  Paris,  since  the 
beginning  of  the  nineteenth  century,  afford  a  means  of 
judging  to  what  extent  these  also  were  capable  of  fulfilling 
a  similar  role. 

In  1803  it  was  reckoned  that  there  were  43,552 
families  or  111,626  individual  paupers  in  Paris,  and  the 
population  at  that  time  was  estimated  at  547416,  so  that 
there  was  i  pauper  to  less  than  5  persons.  Between 
1803  and  1 8 14  there  was  hardly  any  improvement  The 
restoration  brought  peace  to  the  country  and  order  to  its 
finance :  public  works  were  commenced,  industries  upon  a 
large  scale  made  their  first  appearance ;  under  the 
influence  of  these  conditions  pauperism  decreased.  It  is 
calculated  that  in  181 3  there  was  i  pauper  to  5-69 
persons  in  Paris,  and  in  181 8  i  to  8-o8.  By  1864  the 
proportion  had  decreased  to  i  in    i6-i6.       In  this  latter 


152  PAUPERISM  IN  PARIS 

year  (1864),  the  total  number  of  paupers  was  111,357 
(42,098  families);  in  1880,  when  the  population  was,  in 
round  numbers,  2,250,000,  the  number  of  paupers  was 
123,735  (46,815  families)— a  proportion  of  i  pauper  to 
18  inhabitants,  which  is  the  lowest  since  the  Revolution, 
with  the  exception  of  the  year  1750;  but  the  old  suburb 
which  contained  the  largest  proportion  of  pauper  popula- 
tion had  not  then  been  included  within  the  bounds  of  the 
city  of  Paris.  Charity,  also,  was  less  active  then  than  it 
is  now.  1  We  see,  therefore,  that  although  the  population 
of  Paris  quadrupled  between  the  years  1803  and 
1895,  the  number  of  paupers  in  the  latter  year  was 
but  little  in  excess  of  that  in  1803  and  the  following 
years. 

It  should  be  added  that  of  the  130,000  paupers  in 
1895,  54,012  were  classed  as  annual  or  permanent,  and 
76,121  as  temporary,  recipients  of  relief.  In  1893  the 
proportion  of  men,  women,  and  children  to  the  whole 
number  of  paupers  was — men  33-61,  women  64-70,  and 
children  under  sixteen  1-69,  and  of  the  men  a  large 
proportion  were  aged.  The  foregoing  statistics  are  all  the 
more  significant,  when  it  is  remembered  that  the  develop- 
ment of  the  railways  brought  a  crowd  of  the  provincial 
poor  to  the  city.  Dr  Desprez,  who  has  had  great  experi- 
ence in  questions  of  public  relief,  stated  in  a  letter 
published  by  the  Economiste  frangaise,  2nd  February  1884, 
that  provincial  wage  earners  established  in  Paris  fre- 
quently bring  up  their  indigent  parents  from  the  country 
to  be  maintained  by  public  charity  in  that  city.  The  pro- 
portion of  the  number  of  poor  in  receipt  of  relief  in  Paris, 
but  born  outside,  to  the  whole  population  of  the  city  is 
far  larger  than  that  of  the  poor  who  are  natives  of  Paris 
or  foreigners.  ^ 

The  statistics  of  pauperism   in   Paris,  taken   in  con- 

*  These  figures  are  taken  from  the  Siatistigue  de  la  France,  by 
Maurice  Block,  2nd  ed.,  vol.  ii.,  p.  489,  and  from  the  Annuaire  de 
Statistique  for  1883  (by  the  same  author),  p.  452,  and  from  the  same 
annual  for  1 899,  p.  779. 

*  See  Statistique  de  la  France^  Maurice  Block,  2nd  ed.,  vol.  ii.,  p.  489 


FALLACIOUS  STATEMENTS  153 

junction  with  those  for  England,  conclusively  prove  the 
fallacy  of  the  statements  made  by  Marx  and  other 
scientific  or  sentimental  socialists.  The  realities  of  life 
are  less  harsh  than  these  indignant  and  doleful  writers 
imagine,  and  the  social  hell  which  they  depict  exists 
rather  in  their  sombre  imagination  than  rn  the  economical 
organisation  of  modern  society.  In  face  of  the  figures 
quoted,  what  becomes  of  Marx'  so-called  "  law,"  that  the 
accumulation  of  wealth  deprives  a  constantly  increasing 
number  of  the  population  of  employment,  and  reduces 
them  to  want  ? 

and  following  pages.  Also,  Annuaire  de  Statzstique,  by  the  same 
author,  for  1883  and  1895  5  ^"d  Annuaire  de  Statistique  de  la  ville  de 
Paris  for  1893,  published  in  1895  ;  and  the  Census  Returns  for  1896, 


CHAPTER  IV 

The  practical  application  of  collectivism.  Quintessence  of  Socialism 
only  available  source  of  information.  Automatic  performance 
of  social  functions.  Free  choice  of  personal  requirements. 
National  production.  Variation  of  salaries  and  wages.  Statistics 
and  national  production.  Mutual  surveillance  by  workmen. 
Joint  stock  companies  and  state  management.  Individuals  and 
the  progress  of  humanity. 

It  has  not  been  difficult  to  demonstrate  the  sophistical 
character  of  the  so-called  "  scientific  "  deductions  on  the 
subject  of  capital  and  of  wages.  It  now  remains  to 
examine  the  positive  measures  by  means  of  which  it  is 
proposed  to  ameliorate  the  present  social  organisation,  or 
rather,  to  ascertain  by  what  system  that  which  now  exists 
is  to  be  replaced.  In  this  investigation,  Marx  will  be  of 
no  further  use :  his  empty  and  ironical  dialectic  is  confined 
to  criticism,  and  he  makes  no  attempt  to  deal  with  the 
positive  or  constructive  side  ofthecollectivist  theory.  The 
remark  made  by  Proudhon  upon  Louis  Blanc  applies  to 
him  with  equal  truth :  "  As  for  the  philosophical  value 
of  his  work,  it  would  be  precisely  the  same  if  the  author 
had  confined  himself  to  writing  on  each  page  *  I  protest' " 
Marx'  brilliant  rival,  Lassalle,  affords  no  greater  assist- 
ance; his  idea  of  workmen's  associations  subsidised  by 
the  state  was  never  worked  out  in  detail,  nor  did  he 
attempt  to  realise  and  depict  the  future  of  humanity ;  in 
fact,  the  Quintessence  of  Socialism,  by  Schaffle,  already 
frequently  referred  to,  represents  the  only  attempt  that 
has  been  made  to  give  any  definite  idea  of  the  proposed 
reconstruction  of  society.  By  socialism,  Schaffle  means 
the  "  New  Socialism"  or  collectivism,  which  has  nothing  in 

154 


SCHAFFLE  THE  INTERPRETER  155 

common  with  the  sentimental  aspirations  and  vain  dreams 
of  writers  of  the  first  half  of  the  nineteenth  century. 

The  object  of  the  international  socialistic  movement  is 
explained  by  Schaffle  to  mean  the  supersession  of  the 
present  system  of  production  by  means  of  private  capital, 
directed  by  individual  enterprise,  and  free  from  all  social 
regulation  except  that  imposed  by  free  competition, 
and  its  replacement  by  a  system  based  upon  the  posses- 
sion of  all  means  of  production  by  society  as  a  whole. 
This  method  would  suppress  competition  by  placing  all 
production  which  is  capable  of  being  managed  collectively 
under  official  administration,  and  by  distributing  the 
wealth  produced  by  all  to  all,  the  share  of  each 
producer  being  fixed  by  the  social  value  of  the  work 
performed  by  him. 

Under  the  existing  capitalistic  system,  Schaffle  says, 
the  possessor  of  capital  may  select  any  industry  he  chooses, 
and  exploit  it  for  his  own  personal  benefit ;  but  in  a  col- 
lectivist  state  the  community  would  be  able  to  concentrate 
the  now-scattered  forces  of  labour,  and  distribute  to  all  the 
products  thus  collectively  obtained.  Individual  enterprise 
would  exist  no  more ;  there  would  be  only  collective 
labour,  socially  organised  in  establishments  for  production 
and  exchange,  provided  by  collective  capital.  The  profit 
of  the  capitalist,  as  well  as  the  wages  of  the  labourer,  would 
be  abolished,  and  the  deficiency  or  excess  of  products 
would  be  adjusted  in  relation  to  requirements  by  means  of 
reserves  of  commodities  stored  in  public  warehouses. 

This  description  defines  with  sufficient  accuracy  the 
general  meaning  of  collectivism  as  opposed  to  capitalism.^ 

Schaffle  adds  that  loan  capital,  credits,  land  and  house 
rent,  the  bourse,  trade  in  commodities,  markets,  advertise- 
ments, and,  above  all,  metallic  currency,  would  be  abolished 
under  the  new  system ;  but  he  declares  that  in  respect 
of  personal  requirements  and  articles  of  consumption, 
individuals  would  retain  freedom  of  choice,  and  that 
saving,  and  even  inheritance,  would  continue.  An 
average  degree  of  comfort  would  be  secured  for  every- 
*  Schaffle,  op.  city  pp.  3-6. 


156  ANARCHIC  COMPETITION 

body,  and  individual  merit  would  receive  recognition  and 
reward. 

The  various  features  of  this  proposed  collective 
organisation  must  be  considered  in  relation  to  produc- 
tion, trade,  distribution,  and  consumption.  It  is  imperative 
also  to  form  an  opinion  upon  the  probable  effect  such 
a  system  would  have  upon  industrial  progress  and 
liberty,  and  upon  the  relations  between  a  collectivist  state 
and  other  nations,  whether  themselves  also  collectivist  or 
not ;  for  no  state  can  produce  all  it  requires,  and  inter- 
national commerce  is  therefore  a  necessity.  This  last 
point  is  one  of  great  importance,  and  it  is  a  singular  fact 
that  it  has  been  altogether  ignored  by  collectivists. 

One  of  the  points  upon  which  collectivists  rely  as 
evidence  of  the  superiority  of  their  system,  is  that  in 
place  of  what  they  describe  as  the  disjointed,  inhuman, 
and  anarchic  action  of  unrestrained  competition,  it  would 
substitute  harmonious  and  humane  co-operation.  But 
consideration  of  the  close  analogy  which  exists  between 
the  functions  of  the  social  and  those  of  the  human  body, 
seems  to  prohibit  the  hope  that  these  advantages  could 
be  secured.  The  majority  of  the  most  important  functions 
of  the  body  are  performed  without  any  conscious  act  of 
volition :  the  lungs  fill  themselves  with  air  and  purify  the 
blood,  the  heart  beats,  the  stomach  digests,  the  liver,  the 
kidneys,  the  brain,  and  the  various  tissues  select  from  the 
blood  the  constituents  they  require,  and  all  this  is  done 
without  any  conscious  act  of  volition.  Would  it  be  an 
improvement  if  the  punctual  performance  of  these  never- 
ceasing  vital  actions  were  to  be  dependent  on  the  super- 
vision of  the  mind  and  the  will  ?  Even  supposing  this  to 
be  possible,  man  would  obviously  lose  immeasurably  in 
intellectual  leisure,  in  serenity,  and  in  dignity,  without 
securing  any  improvement  in  the  regularity  and  security 
of  his  animal  life.  Again,  in  addition  to  the  vital  functions 
thus  automatically  performed,  many  habitual  acts  which 
are  of  great  importance  and  admirably  adapted  to  effect 
their  objects  are  instinctively  and  unconsciously  performed. 
The  great  significance  of  instinctive  acts  has  been  clearly 


PROVISIONING  OF  GREAT  CITIES  157 

explained  by  Spencer  and  Darwin,  who  have  also  shown 
that  if  they  were  to  become  volitional,  the  action  neces- 
sary to  save  the  individual  from  dangers  to  which  he  is 
constantly  exposed  would  generally  be  too  late. 

We  see,  then,  that  a  social  system  which  postulates  the 
substitution  of  the  slow  and  hesitating  agency  of  the  state 
for  the  free  spontaneous  action  of  individuals,  and  which 
assumes  the  existence  of  equality,  or  approximate  equality, 
in  the  faculties  of  individuals,  is  obviously  opposed  to  the 
teachings  of  contemporaneous  science,  and  to  the  lesson  to 
be  learnt  from  the  doctrine  of  evolution. 

In  society,  as  in  the  individual,  the  greater  part  of 
those  individual  actions,  without  which  life  would  cease, 
are  performed  unconsciously.  The  intervention  of  the 
state  is  unnecessary,  and  would  be  certain  to  cause  derange- 
ment. The  daily  adjustment  of  the  demand  with  the 
supply  of  the  necessaries  of  life  is  of  this  order ;  habit  and 
unfailing  instinct  play  a  great  part  in  the  work,  but  both 
are  directed  by  personal  interest 

At  first  sight  it  is  difficult  to  understand  how  great 
cities  like  Paris  or  London  can  day  by  day  be  regularly 
provisioned  without  the  intervention  of  the  state,  or  at 
least  without  the  assistance  of  regulations  prescribed  by 
authority.  Nevertheless,  their  inhabitants  sleep  with 
tranquillity  undisturbed  by  apprehensions  as  to  the 
provisions  required  for  the  morrow,  which  never  fail,  and 
yet  all  this  is  effected  unconsciously :  "  il  monde  va  da  se," 
as  Galiani  says.  Persons  who  are  absolutely  ignorant  of 
statistics  and  political  economy,  and  who  never  give  a 
thought  to  the  general  welfare,  are  nevertheless  completely 
successful  in  supplying  these  great  cities  with  the  required 
quantities  of  all  the  innumerable  commodities  demanded 
by  their  inhabitants. 

Just  as  the  drops  of  blood  unconsciously  convey  to 
each  organ  in  the  human  body  the  elements  required  for 
its  nutrition,  so  by  individual  men — the  molecules  of  the 
social  organism — each  one  silently  performing  his  task, 
this  marvellous  work  is  accomplished.  It  is  this  perfectly 
adjusted  and  unfailing  mechanism  which  it  is  proposed  to 


158  PERSONAL  INTEREST  THE  REAL  INCENTIVE 

replace  by  the  action  of  collective  intelligence  and  collective 
foresight — in  other  words,  by  the  perplexed  deliberation  of 
a  number  of  individuals  selected  from  their  fellows,  not  on 
account  of  any  special  aptitude  for  the  task,  but  by  the 
fortuitous  action  of  the  ballot. 

This  wonderful  automatic  adjustment  of  supply  and 
demand  is  far  from  being  an  incoherent  and  anarchic  force, 
as  asserted  by  collectivists ;  it  acts  with  perfect  regularity, 
and  in  obedience  to  immutable  laws.  Human  will  is  not 
actuated  by  chance,  it  is  not  blind,  nor  are  its  actions 
inconsequent :  it  is  impelled  by  steady  purpose,  and  in 
obeying  the  impulse  it  acts  with  uniformity.  To  suppress 
individual  initiative  on  the  ground  that  its  action  is 
anarchic,  is  to  repudiate  the  teaching  of  science.  The 
statistics  of  marriages,  of  criminals,  of  letters  posted,  etc., 
show  how  little  the  numbers  vary  from  year  to  year,  and 
illustrate  the  general  uniformity  of  human  actions,  and 
how  far  they  are  removed  from  anarchy.  A  well-known 
philosophical  writer,  Buckle,  in  his  Introduction  to  English 
History,  gives  an  epitome  of  individual  actions,  which,  when 
considered  in  the  aggregate,  no  longer  appear  to  be  either 
unregulated  or  eccentric.  A  force  is  not  necessarily 
unregulated  because  it  acts  automatically ;  on  the  contrary, 
it  is  most  probably  more  regular,  more  uniform,  and  more 
purposeful  in  its  action,  than  a  force  which  is  entirely 
directed  by  volition — a  fundamental  truth  which  is  quite 
disregarded  by  collectivists, 

Schaffle  frankly  acknowledges  that  personal  interest  is 
the  real  incentive  to  effort,  and  questions  whether  an 
equal  degree  of  economic  productivity  would  be  attainable 
under  a  socialistic  regime.  This  question,  to  which  he 
admits  that  no  satisfactory  reply  has  as  yet  been  given,  he 
considers  to  be  of  supreme  importance.  He  enumerates 
various  conditions  which  must  be  fulfilled  by  collectivism 
before  the  desired  end  could  be  attained,  and  adds — 
"otherwise  it  will  scarcely  secure  a  fairer  distribution  of 
the  national  produce,  and  certainly  not  greater  economy 
in  social  production,  than  is  on  an  average  secured  by  the 
liberal  industrial  system,  acting  through  the   most  acute 


INDIVIDUAL  INITIATIVE  159 

stimulus  to  private  interest,  and  by  proportioning  price,  not 
only  to  the  cost  of  production,  but  also  and  mainly  to  the 
value-in-use  of  separate  services  and  commodities  at  a 
given  time  and  place,  and  in  a  given  trade  or  industry."  ^ 

He  goes  on  to  say :  "...  but  one  thing  can  be  positively 
stated.  The  socialist  programme  of  to-day  does  not  yet 
fulfil  this  condition ;  it  has  not  yet  the  necessary  practical 
clearness  of  ideas  as  to  the  requisite  organisation  for 
competing  labour.  And  yet  there  can  be  no  doubt  that  if 
the  present  capitalistic  competition,  with  its  strong  econo- 
mising pressure,  were  withdrawn,  the  competition  of  labour 
would  have  a  larger  task,  and  would  need  a  stronger  impulse 
and  a  nobler  organisation."  ^  What  can  be  said  of  would- 
be  reformers  who  have  so  hazy  a  conception  of  the  changes 
they  advocate,  and  possess  so  little  faith  in  the  reality  of 
the  advantages  they  promise  ? 

Since,  as  is  admitted,  individual  initiative  and  capi- 
talistic competition  exercise  so  powerful  an  influence  in 
securing  great  social  productivity,  it  is  obvious  that  the 
action  of  these  forces  cannot  be  incoherent,  as  is  alleged ; 
if  this  were  so,  they  would  be  self-destructive  and  merely 
subversive.  Such  a  statement  implies  defective  philosophy  ; 
it  is  indeed  ludicrous  at  the  present  day  to  assert  that 
because  a  force  acts  automatically  it  must  on  that  account 
be  necessarily  incoherent  and  subject  to  no  law.  Gravita- 
tion is  a  force  which  is  automatic  in  its  action  ;  and  indi- 
vidual initiative,  apparently  isolated,  but  acting  not  by 
chance  or  caprice,  but  always  with  a  definite  purpose, 
plays  the  same  part  in  the  economic,  as  the  force  of 
gravitation  does  in  the  physical  world.  It  is  this  force 
of  individual  initiative,  essentially  harmonious  and  regular 
in  its  action,  which  holds  society  together  and  ministers  to 
the  requirements  of  all  with  far  more  rapidity  and 
efficiency  than  would  be  possible  under  the  system  by 
which  it  is  proposed  to  replace  it. 

Collectivists  imagine  that  they  can  offer  a  solution  of 
the  problem  of  the  scientific  organisation  of  national 
production  upon  a  collectivist  basis.  The  method  they 
1  Schiiffle,  op.  city  pp.  57,  58.  ^  /^/^,^  p,  53^ 


160  DIRECTORS  OF  PRODUCTION 

propose  is  the  appointment  of  directors  of  national  produc- 
tion, and  the  estabHshment  of  a  permanent  bureau  for 
enquiry.  In  considering  this  proposed  system,  three 
questions  suggest  themselves : 

1.  How,  when  control  and  enquiry  are  officially 
centralised,  could  production  adjust  itself  to  the  require- 
ments of  consumption  ? 

2.  By  what  means  could  producers  be  induced  to  work  to 
the  best  economical  advantage  ? 

3.  How  could  progress,  both  in  industry  and  agriculture, 
be  secured  ? 

We  are  not  told  how  the  committees  of  control  would  be 
formed :  whether  it  would  be  by  the  suffrage,  either 
universal  or  restricted,  by  official  nomination,  or  by  co- 
option,  that  these  men,  who  would  literally  control  the 
life  and  death  of  their  fellow-citizens,  would  be  selected. 
According  to  democratic  theory,  popular  election  will 
always  secure  the  most  capable  individuals ;  but  this  is  a 
curiously  mistaken  idea,  and  is  quite  unsupported  by 
experience.  No  one,  at  any  rate  who  wished  to  produce 
evidence  of  the  infallibility  of  the  elective  method  and 
the  purity  of  the  elected,  would  appeal  to  France,  where 
elected  bodies,  whether  national  or  municipal,  are  full  of 
ignorant  or  simple-minded  men  incapable  of  prevision,  or 
of  men  lacking  character  and  disinterestedness ;  nor  do 
the  United  States  appear  to  be  in  any  better  case  in 
respect  of  the  capabilities  and  the  virtues  of  its  elected 
bodies.  But  assuming  that  the  wisest  and  best  citizens  can 
be  selected  by  popular  election,  how  prodigious  is  the  task 
with  which  they  would  have  to  deal !  Consider  the  present 
French  budget :  what  difficulties  it  discloses,  and  what  an 
effort  is  necessary  to  cope  with  them.  And  yet  it  is  only  a 
matter  of  three,  or,  including  the  extraordinary  budget, 
three  and  a  half  milliards  of  francs  (;^  140,000,000) ;  and  of 
this  sum  the  state  is  only  directly  concerned  with  a  small 
portion.  About  twelve  hundred  million  francs  (^48,000,000) 
merely  pass  through  its  hands  in  payment  of  interest  on 
the  public  debt,  and  many  hundred  millions  of  francs  are 
paid  to  contractors  for  the  execution  of  works  not  under- 


DIRECTORS  OF  DISTRIBUTION  161 

taken  directly  by  the  state.  The  work  of  arranging  the 
budget  is  entirely  financial ;  its  mechanism  is  easy  to 
understand  and  control,  since  for  the  most  part  public 
expenditure  is  in  each  year  very  similar  to  that  in  former 
years ;  nevertheless  the  nation's  representatives  find  even 
this  comparatively  small  business  very  difficult,  and  rarely 
succeed  in  dealing  with  it  successfully.  The  task  of 
officials  responsible  for  national  production  would  be  of  a 
far  more  formidable  character,  both  with  regard  to  the 
work  and  responsibility. 

The  very  life  of  the  whole  nation  would  depend  upon 
the  exact  performance  of  their  duties :  food,  clothing, 
dwellings,  even  amusements — all  must  be  arranged  for ;  and 
since  nothing  could  be  provided,  except  in  obedience 
to  official  directions,  and  in  accordance  with  official 
arrangements,  the  smallest  mistake  might  cause  a  deficiency 
of  bread,  of  meat,  of  fuel,  or  of  clothing,  and  a  faulty 
calculation  might  expose  the  citizens  to  the  risk  of 
starvation.  The  only  task  that  could  equal  so  prodigious 
an  undertaking,  would  be  that  of  the  directors  of  distri- 
bution, who  would  be  responsible  for  the  life  of  each 
individual,  just  as  the  directors  of  production  would  be 
responsible  for  the  life  of  the  nation  as  a  whole.  Is  it 
conceivable  that  men  could  be  found  so  presumptuous 
and  so  self-confident  as  to  assume  responsibility  for  the 
daily  life  and  daily  needs  of  all  these  millions  of  human 
beings  ? 

For  help  and  guidance  in  their  task,  they  would  have 
to  rely  upon  statistics  supplied  by  the  committees  of 
enquiry.  Now,  statistics,  when  carefully  compiled,  make  it 
possible  for  experts  to  form  opinions  which,  if  arrived  at 
with  extreme  caution,  may  be  approximately  correct ; 
they  also  provide  indications  of  which  men  endowed  with 
intuition  and  intelligence  can  make  good  use ;  but  they 
are  defective  in  many  respects,  and  when  the  subject  to 
which  they  relate  is  complex,  they  are  always  liable  to  be 
affected  by  the  idiosyncrasy  of  the  compiler.  Another 
cause  which  makes  this  source  of  information  deceptive 
and  not  to  be  relied  on,  is  the  delay,  often  considerable, 

L 


162  THE  FUNCTION  OF  "PRICE" 

between  the  occurrence  of  the  events  and  the  completion  of 
the  statistics  relating  to  them. 

A  nation  whose  very  existence  depended  upon  the 
absence  of  statistical  errors,  would  indeed  be  in  a  parlous 
state;  even  the  most  perfect  statistics  can  do  no  more 
than  supply  information,  which  has  then  to  be  interpreted, 
and  the  interpretations  are  certain  to  vary  widely. 

The  instinctive  action  of  individual  initiative  in  regu- 
lating production  in  accordance  with  demand,  must  always 
be  infinitely  superior  to  organisation  based  upon  the  most 
trustworthy  statistics,  and  the  fluctuation  of  prices  must 
always  be  a  more  rapid  and  certain  indication  of  the 
required  amount  of  production  than  statistical  abstracts. 
When  the  price  of  corn  rises  or  falls,  it  is  a  sign  that  the 
market  is  either  insufficiently  or  over  supplied.  The  fact 
becomes  immediately  and  widely  known,  and  dealers  in 
both  hemispheres  act  in  accordance  with  the  indication  ; 
but  under  a  collectivist  regime^  price,  the  automatic 
regulator,  which  acts  instantaneously,  and  is  worth  ten 
thousand  "enquiries,"  would  no  longer  exist.  What 
substitute  could  be  found  for  the  warning  it  gives?  It 
would  be  necessary  to  undertake  an  infinite  series  of 
calculations  as  to  the  available  supply  in  relation  to  the 
demand  in  each  different  district.  "  Price "  is  the  sure 
guarantee  of  an  adequate  supply,  and  is  thus  the  guardian 
of  the  subsistence  of  humanity.  If  irony,  so  favourite  a 
weapon  with  Marx  and  Lassalle,  were  resorted  to  in 
criticising  their  childish  schemes  for  organising  national 
production  and  consumption  by  means  of  omnipotent 
councils,  what  a  picture  might  be  painted !  how  easy  it 
would  be  to  depict  the  perplexities  and  miscalculations  of 
the  oligarchy,  without  whose  order  and  permission  no  one 
could  grow  a  turnip  or  manufacture  a  button  !  ^ 

To  guard  against  possible  errors,  which  would  be  fatal, 
on  the  part  of  these  omnipotent  directors,  an  immense 
bureaucratic  system  is  proposed.  On  this  point  Schaffle 
says :  "  Imagine  the  control  of  all  production  vested  in  a 

[^  See  Pictures  of  a  Socialistic  Future,  Eugene  Richter,  Trans- 
lation.   Swan,  Sonnenschein  &  Co.,  Ltd.,  1907.] 


COLLECTIVIST  BOOK-KEEPING  163 

single  office  of  public  economy,  in  a  single  central  office 
representing  the  bureaus  of  production  and  sale,  it  being 
insignificant  whether  this  control  was  arranged  in  the 
spirit  of  federal  or  of  centralistic  socialism.  In  such  a 
case,  no  doubt,  an  actual  transport  of  products  from  one 
factory  to  the  other,  and  a  delivery  to  the  consumers, 
would  have  to  be  organised  from  the  central  and  inter- 
mediate stations  of  the  economic  organisation  ;  transport, 
housing,  and  storage,  in  order  to  secure  the  distribution  of 
each  article  of  production  over  all  the  necessary  districts  in 
the  right  proportion  and  at  the  right  time,  in  proportion 
to  the  public  returns  stating  the  demand  of  each  district, 
become  unavoidable.  Therefore,  transport  and  storage, 
which  accompany  the  trade  of  to-day,  would  be  the 
necessary  concomitants  of  the  barter  of  the  socialistic 
state,  and  would  be  conducted  in  accordance  with  a 
centralised  filing  of  accounts,  book-keeping,  and  settlement 
between  all  the  branches  of  business."  ^ 

The  amount  of  book-keeping  which  would  be  necessary 
under  a  collectivist  regime  would  be  appalling,  and  Schaffle 
asks  himself  with  some  misgivings  "whether  practically 
the  close  commonwealth  of  the  socialists  would  be  able 
to  cope  with  the  enormous  socialistic  book-keeping,  and 
to  estimate  heterogeneous  labour  correctly  according  to 
socialistic  units  of  labour  time."  ^ 

Those  who  imagine  that  it  would  be  possible  to  replace 
the  instinctive,  spontaneous,  and  always  active  force  of 
individual  enterprise,  by  the  slow  and  clumsy  mechanism 
of  accounts  and  statistics,  forget  that  some  human 
necessities  do  not  admit  of  delay. 

Schaffle  describes  with  sufficient  accuracy  the  principal 
objects  of  commercial  enterprise  as  being : 

1.  "Social  determination  of  the  collective  demand 
which,  economically  speaking,  is  able  to  be  satisfied." 

2.  "The  determination  of  the  quantity  and  quality 
demanded  of  the  produce  which,  economically  speaking, 
deserves  to  be  furnished  (is  demanded)." 

3.  "The  continuous    establishment    of   an    exchange 
1  Schaffle,  op.  cit.^  pp.  71,  72.  2  /^/^.^  p.  86. 


164  NATIONAL  RISK 

value  such  as  to  maintain  the  economic  balance  between 
production  and  consumption."^  But  he  forgets  that  for 
the  performance  of  these  complicated  functions,  of  which 
his  analysis  is  very  incomplete,  individual  enterprise  has 
means  far  superior  to  any  that  could  be  derived  from 
statistics ;  its  essential  function  is  to  adjust  supply  to 
demand ;  and  although  statistics  are  one  of  its  channels 
of  information,  they  are  not  the  most  rapid  or  certain. 
"  Price "  is  the  guide,  and  in  response  to  its  unerring 
directions  enterprise,  spurred  by  personal  interest,  acts 
with  extreme  rapidity  and  certainty. 

Deprived  of  this  guidance,  and  without  the  incentive 
of  personal  interest,  accounts  and  statistics,  however 
complete,  would  be  of  very  little  use,  and,  unless  they 
were  the  mundane  representatives  of  an  omniscient 
providence,  the  directors  of  production  would  be  quite 
unable  to  avoid  occasional  excess  or  deficiency  of  supply, 
which  would  cause  terrible  disorder  and  confusion,  with 
effects  infinitely  more  serious  than  mistakes  made  by 
private  enterprise,  which,  as  a  whole,  is  never  actuated 
by  precisely  similar  motives ;  thus  its  errors  correct  each 
other,  and  being  uninfluenced  by  prejudice  or  amour 
propre,  it  shows  a  marvellous  quickness  of  adaptation  ; 
mistakes  committed  by  the  state  would  be  not  only  far 
more  serious,  but  far  more  difficult  to  remedy.  A  col- 
lectivist  regime  would  necessitate  a  bureaucracy  of  the 
hugeness  of  which  we  can  form  no  conception,  far  larger, 
more  pedantic,  and  more  dilatory  than  that  we  now  possess, 
which  even  now  is  the  cause  of  so  much  complaint. 
Seeing  how  vast  and  complex  is  the  task,  it  may  safely 
be  affirmed  that  no  bureaucracy,  however  vast,  could  so 
organise  the  business  of  production  and  distribution  for 
a  great  nation  as  to  avoid  exposing  its  inhabitants  to 
a  constant  risk  of  destitution  and  famine. 

Schaffle    professes    that    under   a   coUectivist   rigime^ 

everyone   would   retain   the   right   of  deciding   upon   his 

personal    requirements.     This    is    a    vital   matter,    upon 

which  the  liberty  and  the   dignity  of  humanity   depend. 

*  Schaffle,  op,  cit.^  pp.  73,  74. 


STATE  TYRANNY  165 

If  society  is  so  organised  that  men  can  no  longer  obtain 
the  objects  they  desire,  and  to  which  they  have  a  right, 
what  becomes  of  liberty?  Liberty,  variety,  life,  are 
terms  inseparably  connected  :  destroy  one  and  the  others 
are  valueless ! 

At  the  present  time,  the  determination  of  individual 
wants  is  unrestricted,  and  is  met  by  free  and  quickly 
responsive  trade.  Besides  the  commodities  indispensable 
for  existence,  civilisation  has  an  infinity  of  requirements ; 
and  so  long  as  the  rights  of  others  are  not  violated,  and 
public  morals  and  conduct  are  respected,  it  is  permissible 
for  each  individual,  so  far  as  his  means  allow,  to  obtain 
whatever  he  desires.  An  elastic  and  tolerant  system  such 
as  this,  is  the  only  one  which  is  compatible  with  liberty ; 
and  short  of  imposing  a  yoke  upon  the  human  conscience, 
heavier  than  that  ever  placed  upon  it  by  the  strictest 
priestly  domination,  governments  are  bound  to  respect 
the  free  determination  and  satisfaction  of  human  wants. 

Private  commerce  alone  can  guarantee  the  continuance 
of  these  conditions.  To-day  it  is  demand  that  determines 
supply,  and  private  enterprise  is  always  on  the  alert  to 
meet  it ;  but  under  a  collectivist  reghne^  when  no  one 
except  the  sovereign  state  could  manufacture  articles  for 
sale,  the  position  would  be  reversed,  and  the  state  would 
be  able  to  ignore  or  eradicate  wants  of  which  they  dis- 
approved by  simply  neglecting  to  supply  them.  If  the 
government  were  to  fall  into  the  hands  of  fanatical 
teetotallers,  the  nation  would  be  forced  to  drink  water 
or  some  authorised  temperance  drink,  and  it  would  be 
contrary  to  law  for  any  one  to  evade  this  unpleasant 
regulation ;  or  if  by  chance  vegetarians  were  to  come 
into  power,  there  would  be  no  more  liberty  of  diet  for 
those  accustomed  to  eat  meat.  No  doubt  such  a  state  of 
affairs  may  appear  improbable,  but  no  one  can  foretell  the 
length  to  which  sectarian  zeal  might  be  carried  by  an 
omnipotent  body,  in  a  position  to  decide  what  commodities 
should  or  should  not  be  produced.  It  might  quite  possibly 
happen  that  the  majority  of  the  directors  of  production 
would  be  vehemently  opposed  to  luxury  of  all  kinds.     If 


166  A  TERRIBLE  YOKE 

this  were  the  case,  pleasing  superfluities,  such  as  jewels 
and  finery,  equally  dear  to  the  daughters  of  the  people, 
as  to  richer  women,  would  be  proscribed,  and  there  would 
be  a  compulsory  reversion  to  the  simplicity  of  attire  and 
the  gloomy  uniformity  of  conventual  life.  Intellectual 
liberty  would  suffer  equally.  Mental  enjoyment  requires 
books ;  but  since  the  state  would  be  the  only  printer  and 
the  only  bookseller,  if  the  administration  fell  into  the  hands 
of  pietists,  the  production  and  sale  of  all  books,  except 
those  bearing  the  impress  of  the  definite  form  of  religion 
approved  of  by  the  state,  would  be  prohibited  ;  the  human 
mind  would  be  thus  subjected  to  a  yoke  more  terrible 
than  it  has  ever  known — the  practices  of  Torquemada  and 
of  the  Inquisition,  would  be  mild  in  comparison.  It  may 
be  said  that  there  is  little  danger  that  a  modern  nation 
would  become  the  prey,  and  state  administration  the 
instrument,  of  pietists ;  but  if  the  choice  of  the  electors 
should  fall  on  free-thinkers,  the  evil  would  be  just  as 
great,  even  greater,  since  of  late  years  a  fierce  and 
intolerant  sect  of  so-called  free-thinkers  has  appeared, 
who  ardently  desire  to  coerce  the  human  conscience  into 
conformity  with  their  barbarous  and  narrow  conceptions. 
Under  the  existing  social  organisation,  even  if  sectarians 
should  succeed  in  securing  the  governing  power,  and  use 
it  to  strangle  all  creeds  other  than  their  own,  the  human 
mind  would  find  partial  relief  at  any  rate  through  the 
agency  of  private  enterprise,  which  would  be  certain  to 
discover  some  way  of  evading  oppressive  regulations. 
But  if  private  enterprise  were  suppressed,  and  the  state 
were  the  only  employer  and  the  sole  distributor  of  sub- 
sistence, no  shelter  would  be  left  for  poor  humanity.  No 
power  that  could  be  granted  under  any  other  system  of 
government,  would  be  comparable  to -that  conferred  upon 
the  directors  of  national  production  under  a  collectivist 
rigime^  and  if  men  of  strong  convictions  became  possessors 

*  For  the  views  of  socialists  upon  this  point,  see  the  Btbliothkgue 
socialiste,  "  Le  capital,"  par  Karl  Marx,  resum^  et  accompagne  d'un 
apergu  sur  le  socialisme  scientifique,  par  Gabriel  Deville  (depuis 
depute),  p.  32. 


HOW  THE  STATE  COULD  CHECK  DEMAND  167 

of  such  a  power,  they  would  be  certain  to  use  it  for  the 
suppression  of  opinions  opposed  to  their  own.  The 
menace  to  philosophical  opinions  is  quite  as  great  as  that 
to  religious  doctrines :  mysticism  and  deism  would  find  no 
more  favour  than  the  most  orthodox  sentiments.  Again, 
what  would  become  of  art  when  the  work  of  artists  would 
be  subject  to  the  dictation  of  the  directors  of  production 
and  the  state  would  be  the  only  purchaser  ? 

Schaffle  finds  himself  compelled  to  admit  that 
collectivism  would  be  a  constant  menace  to  the  freedom 
of  personal  demands,  and  Stuart  Mill,  with  his  wonted 
insight,  acknowledges  the  innate  tendency  of  the  populace 
to  assume  despotic  power.  Here  is  what  Schaffle  says : 
"  It  would  no  doubt  be  in  the  power  of  the  state  to  check 
entirely  all  demand  for  what  seemed  injurious  by  simply 
not  producing  it ;  the  vegetarians — Baltzer,  for  instance — 
lean  towards  socialism  for  this  reason.  But  to  keep  the 
whole  community  free  from  adulterated  and  pernicious 
goods  is  no  small  advantage,  and  the  task  of  guarding 
against  the  abuse  of  this  power — for  instance  by  unreason- 
able temperance  men — could  safely  be  left  to  the  strong 
and  universally  developed  sense  of  individual  freedom. 

There  is,  therefore,  on  the  whole,  no  reason  why  in  a 
system  of  united  collective  production  the  wants  of 
individuals  should  be  regulated  by  the  state  or  limited  by 
its  officials.  It  is  especially  important  to  emphasise  this, 
as  we  must  insist  that  if  socialism  did  deny  the  freedom  of 
the  individual  demand,  it  would  be  the  enemy  of  freedom, 
of  civilisation,  and  of  all  material  and  intellectual  welfare. 
This  one  practical  fundamental  right  of  the  individual,  to 
spend  his  private  income  according  to  his  own  choice,  is 
not  to  be  sold  for  all  possible  advantages  of  social  reform ; 
and  therefore  socialism  must,  to  begin  with,  be  brought  to 
a  clear  understanding  on  this  point.  If  it  unnecessarily 
gives  to  its  principle  of  production  such  a  practical  outcome 
as  shall  endanger  the  freedom  of  the  individual  in  his 
own  household  arrangements,  it  becomes  inadmissible, 
whatever  countervailing  advantages  it  may  promise  and 
even  offer ;  for  the  present  liberal  system,  in  spite  of  all 


168  MALON  AND  STUART  MILL 

its  accretions,  is  ten  times  freer,  and  more  in  the  interests 
of  culture."  ^ 

Schaffle  shows  much  naivetd  in  imagining  that  the 
danger  he  describes  so  clearly  will  be  evaded.  His  French 
translator,  M.  Malon,  malcontent  with  these  gloomy 
forebodings,  quotes  the  following  sentence  from  Stuart 
Mill :  "  Nevertheless,  if  a  choice  between  this  communism 
with  all  its  risks  and  the  indefinite  continuance  of  the 
existing  system  of  society  were  to  become  necessary,  I 
would  choose  communism."  This,  however,  is  only  the 
expression  of  a  passing  feeling  of  chagrin  and  pessimism, 
and  Stuart  Mill  is  far  better  advised  when,  after  reflection, 
he  describes  the  moral  evil  which  is  caused  by  excessive 
state  interference :  "  In  some  countries  the  people  refuse 
to  be  despotically  governed,  in  others  they  desire  that 
every  one  should  have  an  equal  chance  to  tyrannise  over 
his  fellows.  Unhappily,  this  latter  kind  of  desire  is  quite 
as  natural  to  humanity  as  the  former,  and  many  examples 
of  it  may  be  found  amongst  civilised  men.  In  proportion 
to  the  extent  to  which  a  nation  accustoms  itself  to  manage 
its  own  affairs,  in  place  of  permitting  their  government 
to  do  it  for  them,  will  be  its  desire  to  repudiate  tyranny 
rather  than  exercise  it.  When,  on  the  contrary,  initiative 
and  actual  administration  are  in  the  hands  of  the  govern- 
ment, and  individuals  feel  themselves  to  be  always  in 
subjection  to  its  tutorship,  public  institutions  develop,  not 
any  desire  for  liberty,  but  an  unlimited  appetite  for  place 
and  power ;  the  intelligence  and  energy  of  the  people 
are  thus  diverted  from  their  proper  work  to  a  contemptible 
competition  for  the  posts  and  petty  distinctions  of  public 
functions."  ^ 

The  strength  of  this  natural  tendency  seems  to  preclude 
the  hope  that  collectivism  would  respect  individual  freedom 
of  demand ;  and  if  the  state  were  to  become  the  sole 
producer,  official  regulation,  subject  to  no  appeal,  would  be 
substituted  gradually  but  inevitably  for  freedom   in   the 

*  Schaffle,  op.  cit.^  pp.  44,  45. 

*  Principles  of  Political  Economy^  Stuart  Mill,  book  v.,  chapter 
xi.,  p.  6. 


REGULATION  OF  SUPPLY  AND  DEMAND  169 

choice  and  satisfaction  of  personal  requirements.  Party 
would  reign  and  crush  its  enemies,  and  the  minority,  how- 
ever numerous  or  intelligent  it  might  be,  would  no  longer 
have  any  protection. 

This  inevitable  consequence  of  the  proposed  system 
ought  to  be  sufficient  to  secure  its  rejection,  however 
attractive  its  promises  might  be ;  but  these  promises  them- 
selves will  not  bear  examination. 

Sagacious  socialists  recognise  the  enormous  difficulty 
involved  in  the  satisfactory  organisation  of  a  system  for 
national  production,  but  they  have  no  better  defence 
against  criticism  than  hypotheses  and  conjectures.  A 
collectivist  system  of  national  production  must  of  necessity 
be  uniform  throughout  the  country,  and  would  therefore 
require  a  highly  centralised  organisation. 

It  is  inconceivable  that  any  economically  satisfactory 
classification  of  industries  could  be  devised  ;  as  things  now 
are,  the  discrepancy  between  supply  and  demand  registers 
with  unfailing  precision  the  requirements  of  commerce,  and 
supplies  a  guide  of  extreme  sensibility.  The  moment  that 
there  is  a  rise  of  profit  or  of  wages  in  any  branch  of  trade, 
it  is  a  sign  that  in  that  trade  demand  exceeds  supply,  and 
conversely  when  they  fall.  We  see,  therefore,  that  it  is 
the  market  price,  constantly  varying,  which  maintains 
the  economic  equilibrium  between  supply  and  demand. 
Schaffle,  with  all  his  ingenuity,  is  unable  to  discover  any 
substitute  for  this  equipose,  and  suffers  from  anxieties  upon 
the  subject,  which  he  vainly  attempts  to  allay  by  hypotheses 
which  are  themselves  irreconcilable  with  the  principles  of 
collectivism.  "The  bureaus  of  disposal  ascertain  the 
demand,  distribute  accordingly  the  national  labour  among 
the  different  classes  of  trade,  among  the  departments  of 
production,  transport,  and  storage,  and  their  bureaus,  and 
fix  the  value  of  the  produce  in  proportion  to  the  labour- 
time  socially  necessary  spent  upon  it."  ^ 

The  idea  contained  in  these  words  is  less  simple  than 
it  appears  to  be  at  first  sight.     Neither  Schaffle  nor  Marx 
intend  that  wages  should  invariably  be  regulated  by  the 
1  Schaffle,  op.  cil.,  p.  74. 


170  FOREBODINGS  OF  FAILURE 

time  actually  worked,  and  both  admit  the  existence  of 
slight  differences  and  inequalities ;  but  the  consideration 
of  this  question,  which  relates  rather  to  distribution  than 
production,  will  be  deferred  for  the  present. 

The  expedients  to  which  Schaffle  resorts  in  attempting 
to  find  some  substitute  for  the  foresight  exercised  under 
the  incentive  of  personal  interest,  and  for  the  guidance 
afforded  by  the  fluctuations  of  profits  and  wages,  shows 
how  great  are  the  perplexities  and  inconsistencies  of  the 
collectivist  doctrine.  "  The  socialist  state,"  he  says,  "  would 
never  be  capable  of  coping  with  its  task  if  it  did  not  follow 
on  these  lines, — if  it  fixed  the  day's  wages  only  on  the  basis 
of  sheer  cost  in  labour-time  instead  of  rating  it, — where 
there  is  a  local  and  temporary  fall  in  the  use-value  of  any 
kind  of  work,  more  or  less  below  the  simple  day's  work ; 
and  where  there  is  a  local  and  temporary  rise  of  the  use- 
value  of  the  same,  above  the  simple  day's  work,  as  the 
case  may  be.  If  it  is  not  competent  to  do  this,  it  will 
never  be  able  to  check  the  unproductive  accumulation  of 
commodities,  but  will  be  compelled  to  order  all  workmen 
to  their  several  posts  of  labour." 

This  candour  is  admirable,  as  also  is  that  shown  by  the 
admissions  which  occur  so  frequently  in  his  book, — such, 
for  instance,  as  the  following :  "  If  socialism  cannot  do 
this,  if  it  does  not  know  how  to  retain  freedom  of  demand, 
it  would  destroy  all  civilisation :  if  it  cannot  retain  the 
sanctity  of  the  home,  it  would  almost  entirely  put  an  end 
to  liberty :  if  it  is  unable  to  devise  means  of  securing  the 
variation  of  prices  and  wages  in  response  to  fluctuation  in 
demand,  it  could  not  escape  from  useless  accumulation  on 
the  one  hand,  or  from  deficiency  on  the  other."  ^  This 
constant  repetition  of  phrases,  in  which  he  declares  that 
if  the  collectivist  system  cannot  accomplish  this  or  that 
it  is  hopeless,  indicates  a  singular  mental  attitude  in 
one  who  writes  as  the  evangelist  of  a  new  social  order  of 
things ! 

In  place  of  these  gloomy  forebodings  of  failure,  an 
advocate  of  collectivism  ought  to  show  that  this  system 
*  Schaffle,  op.  cit^  p.  91. 


UTILITY-VALUE  OF  SOCIAL  LABOUR      171 

would  be  capable  of  successfully  performing  its  duties  and 
of  avoiding  the  dangers  indicated.  To  prove  its  inherent 
incapability  of  performing  this  double  task,  it  is  only 
necessary  to  give  some  further  quotations  from  Schaffle. 
"  On  the  contrary,  if  the  use- value  is  included  in  the  social 
labour  estimate  (the  social  value-in-exchange),  private 
interest  will  withdraw  the  workmen,  then  as  now,  from 
unproductive  fields  of  labour  to  those  which  are  pro- 
ductive. No  compulsory  assignment  of  posts  would  be 
necessary ;  all  the  real  advantages  of  liberal  free  migration 
and  a  free  choice  of  employment  might  then  be  rather 
considered  as  transferable  to  the  social  state.  The 
freedom  of  individuals  in  turning  their  energies  to  work 
would  be  preserved,  A  profitable  rearrangement  of  labour- 
power  would  be  made  possible  for  the  officials  appointed 
to  organise  it 

"  In  itself  the  taking  into  consideration  of  the  use-value 
in  determining  social  value  rates  is  not  inconceivable. 
With  unified  production,  it  would  very  soon  be  noticed 
what  kinds  of  labour  are  in  excess  or  in  demand,  and 
where  this  is  the  case.  The  alterations  and  diminutions  in 
the  demand  might  be  much  better  surveyed  as  a  whole. 
Lower  or  higher  rates  would  have  to  be  fixed  accordingly, 
in  order  to  stimulate  the  migration  of  labour  suitably  to 
economical  requirements.  But  then  the  present  mistake 
in  their  theory  of  value,  according  to  which  the  value 
conforms  to  the  social  labour-cost  alone,  would  have  to  be 
abandoned,  in  respect  of  the  estimated  value  of  produc- 
tions. Both  would  have  to  be  lowered  when  the  use-value 
rises.  Unless  this  use- value  is  introduced  into  the  social 
estimate — that  is,  without  a  corresponding  imitation  of  all 
incidents  which  affect  value  in  the  present  market — it  is 
not  conceivable  that  any  authoritative  direction  of  the 
consolidated  productive  system  could  keep  the  demand  for 
labour  and  for  goods,  as  to  quantity  or  kind,  in  harmony 
with  the  supply  of  labour  and  of  goods — that  is,  could 
preserve  that  economical  balance  of  work  and  consumption 
which  is  being  daily  re-established,  though  only  by  jerks, 
under  the  influence  of  the  market  prices,  which  take  note 


172    EXCHANGE-VALUE  OF  SOCIAL  LABOUR 

of  fluctuating  use-value  (demand),  as  well  as  of  labour-cost 
in  production. 

"  It  may  therefore  be  seen  that  three  things  depend 
upon  the  correction  of  the  theory  of  exchange-value  in 
question : — (i)  The  possibility  of  maintaining  and  of 
generally  directing  so  great  a  body  of  labour,  production, 
and  demand,  in  economical  equilibrium  ;  (2)  The  granting 
of  the  necessary  individual  freedom  of  labour  and  con- 
sumption ;  (3)  Lastly,  the  stimulation  of  each  individual 
at  all  times  to  the  economical  employment  of  labour- 
power  and  of  goods.  By  this  means  the  new  condition  of 
things  would  indeed  come  very  much  nearer  to  the 
life  of  the  present  day  and  to  its  usages. 

"  Now,  whether  it  would  ever  be  possible  to  organise  a 
social  system  of  assessing  values  (a  determining  of  the 
social  exchange- value),  according  to  a  scale  in  which  the 
particular  and  changing  use-value  of  all  individual  labour 
and  all  particular  produce  should  be  a  factor,  we  will  not 
decide  for  the  present.  The  question  has  hardly  yet  been 
discussed,  and  is  therefore  not  ripe  for  decision."  ^ 

That  the  question  thus  evaded  is  one  of  vital 
importance,  is  clearly  shown  by  what  Schaffle  says  with 
respect  to  it :  "  But  we  venture  to  affirm,  absolutely,  that 
to  have  regard  to  the  use-value  in  the  constitution  of  the 
exchange  -  value  (social  value)  of  labour  and  of  produce, 
must  be  considered  as  the  first  and  most  decisive  prelimin- 
ary condition.  In  other  words,  if  socialism  is  not  able  to 
preserve  all  the  good  points  of  the  liberal  system,  such  as 
freedom  of  labour,  and  of  domestic  supply,  and  then  to 
annex  to  these  its  own  undeniable  specific  advantages  (of 
reciprocal  supervision  and  control  of  labour;  a  more 
efficient  but  free  discipline ;  a  more  certain  check  against 
over-work,  and  against  the  neglect  of  women  and 
children ;  the  hindrance  of  exploitation  by  private 
interest ;  the  removal  of  idleness,  and  of  unproductive 
parasitic  life ;  the  prevention  of  corruption,  of  boundless 
luxury,  of  crimes  against  property,  etc.), — if  it  is  not  able  to 
accomplish  this,  it  has  no  prospect  of,  and  no  claims  to 
'  SchafBe,  op.  cit.,  pp.  92-94. 


VARIATION  OF  WAGES  173 

realisation."  ^  All  these  passages  do  honour  to  Schaffle's 
sagacity,  and  at  the  same  time  demonstrate  the  strength  of 
his  prepossession  and  the  weakness  of  his  thesis.  The 
difficulties  which  he  so  distinctly  foresees  are  gigantic,  the 
means  of  surmounting  them  he  takes  for  granted ;  but  no 
one  can  be  expected  to  believe  that  collectivism  could 
actually  accomplish  what  Schaffle  himself  tells  us,  can  only 
be  hoped  for,  but  cannot  be  anticipated — namely,  that  its 
ability  to  secure  that  the  price  of  commodities  and  the 
rate  of  wages  would  be  determined,  not  by  cost  of  produc- 
tion or  by  arbitrary  regulations,  but  by  the  fluctuations  of 
demand.  Such  a  method  of  determining  prices  would  not 
only  be  opposed  to  the  principles  of  collectivism,  but 
common  sense  refuses  to  admit  that  under  a  regime  which 
absolutely  prohibits  competition  and  suppresses  commerce, 
there  could  be  any  room  for  the  influence  of  the  fluctua- 
tions in  value  of  commodities.  The  effect  of  Schaffle's 
suggestions  would  indeed  be  to  destroy  the  mechanical 
uniformity  which  is  both  the  condition  and  the  object  of 
collectivism.  From  another  point  of  view  also,  they  violate 
the  fundamental  principles  of  socialism,  since  they  involve 
an  admission  that,  in  the  highest  interests  of  society — 
namely,  the  prompt  adjustment  of  supply  and  demand — it 
is  essential  that  salaries  and  wages  ought  to  vary,  not  only 
with  the  difficulty  of  the  work  or  the  diligence  and  ability 
of  the  workmen,  but  also  in  response  to  those  external, 
accidental,  and  temporary  influences  which  are  caused  by 
the  fluctuations  of  demand,  and  Schaffle  admits  that  failing 
this  variation  the  economic  function  of  supply  could  not 
be  fully  and  efficiently  performed,  and  the  regular  existence 
of  society  would  in  consequence  be  precarious.  Thus, 
under  a  collectivist,  as  under  the  existing  regime,  wages  in 
one  trade  might  rise  without  a  corresponding  rise  in  other 
trades,  without  any  increase  of  work-time,  and  quite 
irrespective  of  the  personal  merits  or  needs  of  the  work- 
men, or  of  the  strain  of  their  work.  Such  a  variation  of 
wages  is  unavoidable  in  economic  production,  but  theories 
founded  upon  these  differences  which  to  most  collectivists 
'  Schaffle,  op.  cit.,  pp.  94-95. 


174  THE  PROBLEM  UNSOLVED 

represent  inequality  and  injustice,  would  be  repudiated 
and  opposed  by  them.  The  opinion  of  wage  earners 
themselves  upon  the  question  of  the  equality  of  wages  is 
known ;  it  is  hoped  that  they  may  be  induced  to  acquiesce 
in  inequality  of  wages,  at  any  rate  in  trades  which  differ 
in  the  extent  of  risk  or  fatigue  they  involve,  or  in  the 
amount  of  intellectual  ability  they  demand  ;  but  it  cannot 
be  expected  that  men  would  resign  themselves  to  an 
inequality  caused  by  external  and  temporary  conditions,  of 
which  the  individual  workman  would  be  either  the 
innocent  victim  or  the  undeserving  favourite. 

We  see,  then,  that  the  momentous  problem  of  the 
adjustment  of  supply  and  demand  under  a  collectivist 
regime,  in  all  localities  and  in  all  industries,  remains 
unsolved.  The  play  of  prices  would  vanish  with  the 
disappearance  of  private  trade,  as  also  would  that  variation 
in  profit  which,  although  apparently  unjust,  is  in  reality 
the  instrument  by  means  of  which  harmonious  interaction 
between  production  and  requirements  is  maintained.  In 
place  of  these  potent  and  benign  forces,  the  only  safeguard 
against  disaster  would  be  infallibility  on  the  part  of  the 
economic  administration  of  the  socialist  state ;  but  history 
and  experience  show  that  state  administration,  so  far  from 
being  infallible,  is,  on  the  contrary,  far  inferior  to  private 
administration  in  respect  of  certainty  and  promptitude  of 
conception  and  execution.  On  the  one  side  there  is  private 
interest,  always  alert  and  active ;  on  the  other,  officials 
hampered  by  rigid  regulations  imposed  by  a  bureaucracy, 
slaves  of  red  tape,  capable  of  dealing  with  normal  con- 
ditions only,  and  impotent  when  confronted  with  the 
exceptional  difficulties  and  unexpected  vicissitudes  to 
which  the  economic  world  is  always  liable.  Again,  on  the 
one  side  we  have  the  energies  of  millions  of  men  freely 
and  actively  engaged  in  work  which  they  understand,  on 
which  their  living  depends,  and  which,  therefore,  they 
perform  with  the  greatest  keenness  ;  and  on  the  other,  the 
cool  indifference  of  administrators,  who  would  be  quite  as 
much  benumbed  as  stimulated  by  the  responsibilities 
thrown  upon  them.     No  doubt  there  are  certain  services 


DEFECTS  OF  STATE  ADMINISTRATION     175 

which  can  be  satisfactorily  performed  by  the  state,  but  this 
does  not  justify  the  inference  that  all  services  may  be 
nationalised  with  safety ;  those  referred  to  must  be  of  a 
simple  character,  and  the  demand  which  they  supply  must 
be  a  practically  constant  one.  In  all  those  branches  of 
industry  which  are  now  administered  by  the  state,  the 
system  of  similar  private  administrations  is  copied  with 
almost  complete  fidelity,  as  in  the  case  of  state  railways. 
Nevertheless,  the  defects  of  public  administration,  even 
when  thus  minimised,  are  serious,  and  for  the  most  part 
irremediable.  These  defects  assume  various  forms — for 
example,  a  refusal  to  accept  financial  responsibility  for 
losses  caused  by  the  errors  of  its  employees,  as  in  the  case 
of  telegraphic  despatches,  or  they  are  shown  by  the 
imposition  of  excessive  rates,  as  in  the  case  of  registration 
of  declared  values,  for  which  the  state  charges,  even  after 
recent  reductions,  are  far  higher  than  those  asked  by  private 
companies.  Again,  there  is  the  great  difficulty  of  obtaining 
any  legal  remedy  in  case  of  abuse  when  the  state  is 
the  defendant ;  the  public  also  suffer  from  the  supercilious- 
ness and  indifference  with  which  they  are  so  frequently 
treated  by  state  officials  and  employees  ;  and  finally,  there 
is  the  dilatoriness  of  the  state  in  respect  of  progress  and 
improvements,  a  striking  instance  of  which  is  the  unfulfilled 
demand  made  for  so  many  years  for  postal  orders  payable 
to  bearer.^ 

Would  these  defects  be  likely  to  disappear  if  the  state, 
in  place  of  providing  a  few  simple  services,  were  to 
undertake  to  satisfy  all  social  requirements  without 
exception,  even  the  most  complicated  and  variable 
demands,  such  as  those  for  food  and  clothing  ?  Socialists 
hope  that  this  would  be  the  case,  and  Schaffle  takes  pains 
to  point  out  the  grounds  for  this  hope.  "  But  further,"  he 
says,  "  the  socialists  are  able  to  allege  that  government 
works   under    the    liberal    capitalistic    system   are   under 

[^  The  Paris  correspondent  of  the  Times,  writing  on  the  13th  April 
1908,  says  that  the  system  of  postal  cheques  seems  likely  to  be  applied 
before  long  in  France,  owing  to  the  initiative  of  M.  Chastenet,  Deputy 
for  the  Gironde. — Times,  14th  April  1908.] 


176  MUTUAL  SURVEILLANCE 

totally  different  conditions  from  those  of  government 
works  under  the  socialistic  system ;  they  would  point 
out  that  the  workmen  and  overseers  of  government  works 
to-day  have,  of  course,  no  possible  personal  interest  in 
producing  carefully  and  well  for  the  state.  The  state 
pays  them  their  wage,  whether  they  have  worked  well  or 
ill  But  it  would  be  otherwise  if  each  received  more 
income  the  more  all  the  rest  accomplished  in  each  and 
every  department.  Then  to  do  good  work  for  the 
community  in  every  branch  would  have  become  in  the 
highest  degree  the  private  interest  of  each;  the  control 
and  discipline  of  labour,  which  is  becoming  under  our 
system  more  and  more  impossible,  and  the  lack  of  which 
is  leading  it  ever  nearer  to  the  verge  of  collapse  (so 
say  the  socialists)  would,  under  their  system,  be  better 
guaranteed  by  their  collective  bonuses ;  for  it  would  be  a 
matter  of  importance  to  each,  in  respect  of  his  bonus  and 
his  pay,  that  no  one  should  receive  a  full  certificate  for 
bad  or  lazy  work  ;  it  would  be  to  the  interest  of  each  that 
the  average  cost  in  labour  should  be  as  low  as  possible, 
because  the  price  of  social  products  would  be  determined 
by  it,  so  that  labour  certificates  would  be  worth  more  the 
lower  the  social  cost  of  every  kind  of  commodity."  ^ 

Mutual  surveillance,  therefore,  is  what  Schaffle  relies 
upon  to  maintain  the  efficiency  of  labour.  We  shall  return 
presently  to  the  question  of  common  interests;  but  with 
regard  to  this  latter  argument  he  forgets  that  collectivism 
proposes  nothing  new :  everyone  under  existing  circum- 
stances has  just  the  same  interest  in  seeing  that  prices 
are  as  low  as  possible ;  but  this  kind  of  interest  is  so 
seldom  present  to  the  minds  of  most  men,  that  it  is  of  very 
little  practical  value ;  in  fact,  this  argument  is  no  more 
than  the  expression  of  a  pious  hope  that  under  a  collec- 
tivist  regime,  men  would  become  better,  more  laborious, 
more  economical,  and  more  conscientious  than  they  are 
at  present. 

The  reality  would  in  all  probability  be  very  different 
from  this  ideal.  The  present  faults  of  public  administration 
1  Schaffle,  op.  cit,  pp.  53,  54. 


OPPORTUNITIES  FOR  CORRUPTION         177 

would  increase,  because  the  privately  managed  industries 
which  now  serve  more  or  less  as  models,  and  which 
maintain  the  spirit  of  emulation,  would  have  disappeared, 
and  also  because  state  production,  having  become  far 
greater  and  infinitely  more  complex,  state  regulations 
would  necessarily  be  proportionately  stricter  and  more 
vigorously  enforced,  and  would  therefore  be  still  more 
hostile  to  initiative  and  progress  than  they  are  at  present. 

The  huge  size  and  complexity  of  the  public  administra- 
tive bodies  would  multiply  opportunities  for  corruption, 
and  the  directors  would  be  exposed  to  temptations  against 
which  it  would  be  difficult  to  provide  efficient  protection. 
It  may  be  objected  that  under  the  existing  economic 
system  it  is  found  quite  possible  to  administer  great 
undertakings  successfully,  without  extravagance  or  loss 
caused  by  inefficiency,  and  that  this  is  so  even  in  cases 
where  it  is  impossible  to  secure  the  ubiquitous  presence 
of  the  master's  eye.  But  the  inferences  which  collectivists 
draw  from  this  fact  are  based  upon  inexact  observation, 
and  are  consequently  erroneous.  There  is  no  doubt  a 
strong  tendency  to  convert  private  industrial  undertakings 
into  joint  stock  companies,^  and  this  process  is  regarded 
as  a  transitional  stage,  which,  by  habituating  men  to 
work  for  an  impersonal  and  invisible  employer  would 
facilitate  the  substitution  of  the  state  for  companies,  and 
would  thus  prepare  the  way  for  the  national  collective 
ownership  of  all  the  means  of  production.  In  cases 
where  the  scale  of  production  is  so  large  that  the 
individual  employer  has  been  replaced  by  a  company  or 
collective  employer,  no  one,  collectivists  declare,  would 
raise  any  serious  objection  to  state  ownership. 

This  reasoning  is  plausible,  but  incorrect  Administra- 
tion by  joint  stock  companies  has  serious  defects,  and 
wherever  it  is  possible  to  retain  individual  proprietorship 
and  administration,  it  is  by  far  the  most  efficient  system. 

Although  the  principles  upon  which  joint  stock 
companies  are  managed  are  precisely  the  same  as  those 
by    which    private    industry   is   directed,   even   the   best 

^  See  La  repartition  ties  richesses,  P.  Leroy  Beaulieu,  chapter  xii. 

M 


178  JOINT  STOCK  COMPANIES 

organised  and  most  strictly  administered  of  these  under- 
takings are  liable  to  losses  caused  by  negligence  and 
waste,  evils  to  which  the  state  as  sole  employer  would  be 
even  more  liable  than  the  largest  company. 

When  the  business  of  a  joint  stock  company  is  intricate 
and  difficult,  the  managers  are  stimulated  by  large 
emoluments ;  as  a  rule,  these  great  undertakings  really 
depend  upon  one  man,  who  is  given  very  large  authority, 
is  practically  irremovable,  and  who  receives  a  large  share 
of  the  profits ;  it  is  the  same  throughout  the  system,  the 
superintendents  and  the  foremen  are  also  sharers  in  the 
profits,  and  feel  assured  of  the  permanence  of  their 
positions  ;  but  collectivism,  with  its  uncompromising  spirit 
of  equality,  would  altogether  repudiate  these  concessions, 
which  nevertheless  are  essential  conditions  of  successful 
working. 

In  fact,  the  difference  between  the  management  of 
joint  stock  companies,  however  large,  and  the  administra- 
tion of  a  collectivist  state,  is  one  of  kind  and  not  of  degree. 
The  former  is  based  upon  personal  interest,  and  is  always 
exposed  to  competition,  whilst  the  latter  would  exclude 
personal  interest,  and  would  be  free  from  all  home  rivalry. 
As  regards  foreign  competition,  we  shall  see  presently, 
that,  by  its  very  nature,  a  collectivist  state  would  be 
compelled  either  to  abolish  foreign  trade  altogether,  or 
reduce  it  to  a  minimum. 

Other  questions  which  suggest  themselves  are  these : 
What  incentive  would  a  collectivist  rigiine  offer  to  the 
workman  to  employ  his  labour-force  to  the  best  advantage  ? 
What  inducement  would  there  be  for  improvement  and 
progress,  and  what  substitute  could  be  found  for  the 
potent  influences  of  industrial  competition  and  personal 
interest?  With  his  habitual  perspicacity  and  candour, 
Schaffle  sees  and  admits  the  inadequacy  of  official 
injunctions  to  secure  these  objects.  He  says:  "  It  will  not 
be  sufficient  by  itself,  in  a  producing  community  of 
millions,  for  producer  A  to  feel :  '  my  income  from  my 
social  labour  is  conditional  upon  my  999,999  co-operating 
comrades   being    as    industrious   as    I.'      This    will    not 


INDUCEMENTS  TO  EXERTION  179 

suffice  to  awaken  the  necessary  reciprocal  control ;  at  any 
rate,  it  will  not  stifle  the  impulse  to  laziness  and  to 
dishonesty,  nor  hinder  men  from  defrauding  the  public 
of  their  labour-time,  nor  render  impossible  a  cunning 
or  prejudiced  contrivance  for  the  unjust  valuation  of 
individual  performances.  Socialism  would  have  to  give 
the  individual  at  least  as  strong  an  interest  in  the 
collective  work,  as  he  has  under  the  liberal  system  of 
production — it  would  have  to  secure  to  every  sub-group 
a  premium  on  extraordinary  amounts  of  collective  pro- 
duction, and  a  loss  through  ^  collective  slackness ;  it  is 
as  much  and  still  more  bound  to  bestow  effective  dis- 
tinction on  all  special  success  in  technical  development, 
and  duly  to  reward  great  individual  merit;  and  finally, 
would  have  to  provide  that  all  the  innumerable  labour- 
forces  should  be  directed  into  the  channel  of  their  most 
profitable  use,  not  by  the  orders  of  an  authority,  but  by 
the  force  of  individual  interest.  Otherwise,  it  will  scarcely 
secure  a  fairer  distribution  of  the  national  produce,  and 
certainly  not  greater  economy  in  social  production,  than 
is  on  an  average  secured  by  the  liberal  industrial  system, 
acting  through  the  most  acute  stimulus  to  private  interest, 
and  by  proportioning  price,  not  only  to  the  cost  of  pro- 
duction, but  also  and  mainly,  to  the  value-in-use  of 
separate  services  and  commodities  at  a  given  time  and 
place,  and  in  a  given  trade  or  industry. 

"  I  am  by  no  means  prepared  to  maintain  that  socialism 
could  not  succeed  in  doing  this.  The  scientific  discussion 
and  thorough  sifting  of  this  question  is  now  only  in  its 
beginnings.  But  one  thing  can  be  positively  stated :  the 
socialist  programme  of  to-day  does  not  yet  fulfil  this 
condition ;  it  has  not  yet  the  necessary  practical  clearness 
of  ideas  as  to  the  requisite  organisation  of  competing 
labour.  And  yet  there  can  be  no  doubt  that  if  the 
present  capitalistic  competition,  with  its  strong  economis- 
ing pressure,  were  withdrawn,  the  competition  of  labour 
would  have  a  larger  task,  and  would  need  a  stronger 
impulse  and  a  nobler  organisation. 

\}  Query,  "a  fine  for."] 


180  PROFIT  THE  SAFEGUARD  OF  PRODUCTION 

"  In  particular,  the  socialistic  theory  of  value,  so  long  as 
it  depends  for  the  computation  of  the  value  of  com- 
modities only  upon  their  cost  to  the  community,  and  not 
upon  their  constantly  changing  value-in-use  at  given 
times  and  places,  is  quite  incapable  of  solving  the  problem 
of  production  with  collective  capital  which  socialism 
propounds  on  any  real  sound  economic  basis.  As  long 
as  socialism  has  not  something  quite  other  than  this, 
and  more  positive,  to  offer  on  this  point,  it  has  no  chance. 
Its  proposal  to  abandon  a  system  of  production  which, 
with  all  its  disadvantages,  does,  nevertheless,  afford  to  a 
tolerable  degree  a  many-sided  guarantee  of  economy,  for 
the  sake  of  a  fairer  distribution  of  produce  whose  possibly 
accruing  disadvantages  are  at  present  beyond  our  power 
to  forecast — this  proposal,  I  say,  will  not  prevail  by  fair 
means,  and,  if  carried  into  effect  by  force,  will  not  have  a 
lasting  success."  ^ 

This  candid  avowal  shows  how  with  Schaffle  common 
sense  is  continually  in  conflict  with  the  sentiment  and 
prepossessions  which  are  the  cause  of  his  socialistic 
proclivities. 

All  the  criticism  directed  by  collectivists,  including 
Marx,  against  the  capitalistic  system  of  society,  and 
against  political  economy,  is  founded  upon  the  fantastic 
definition  of  "  value "  which  they  have  elaborated ;  and 
yet  we  find  Schaffle  declaring  that  the  socialistic  theory 
of  value  is  quite  incapable  of  solving  the  problem  of 
collective  production.  Since  collectivism  is  thus  dis- 
covered to  be  based  upon  a  theory  shown  to  be  radically 
inef^cient,  the  obvious  course  would  seem  to  be  the 
abandonment  of  the  doctrine ! 

"Profit"  is,  in  fact,  the  only  possible  safeguard  of 
production,  as  well  as  of  distribution  and  of  commerce ; 
but  it  is  with  "  profit "  that  collectivists  quarrel ;  yet 
without  its  guidance,  production  would  be  a  matter  of 
chance,  and  humanity  would  always  be  exposed  to  the 
risk  of  destitution  and  famine.  Schaffle  has  indeed  good 
reason  to  warn  his  readers  against  putting  faith  in  the 
^  Schaffle,  op.  cit.^  pp.  57-59. 


DAY-WORK  V.  PIECE-WORK  181 

mutual  control  of  workmen  as  a  safeguard.  Emulation 
in  workshops  would  soon  degenerate  into  competition, 
which  would  be  disastrous ;  collectivism  refuses  to  have 
anything  to  do  with  competition  of  any  kind,  and  Schaffle 
recognises  that  emulation  carried  to  excess  would  soon  put 
an  end  to  collectivism. 

Schaffle  objects  also  to  the  system  of  co-operation 
advocated  by  Schulze  de  Delitzsch,  to  co-partnership,  and 
even  to  the  workmen's  associations  proposed  by  Lassalle, 
as  well  as  to  autonomous  associations  of  labour  and  capital, 
on  the  ground  that,  if  under  the  pretext  of  securing  a 
spirit  of  emulation,  these  secondary  collective  associations 
were  to  be  permitted,  the  existing  economic  system,  or 
something  very  like  it,  would  be  gradually  reintroduced. 
But  if  excess  of  emulation  is  to  be  dreaded  and  esprit  de 
corps  in  workshops  is  to  be  regarded  with  suspicion, 
mutual  control  would  altogether  lose  what  little  efficiency 
it  might  have  possessed.  An  illustration  of  what  might 
be  expected,  may  be  drawn  from  the  experience  of  1848. 
Amongst  the  many  workmen's  associations  then  estab- 
lished in  France  which  received  state  assistance,  there 
was  one,  that  of  the  tailors,  which  (inspired  by  the  ideas 
of  Louis  Blanc)  substituted  day-  for  piece-work,  in  the 
belief  that  mutual  control  would  secure  efficiency. 
Fengueray,  the  author  of  a  history  of  these  associations, 
relates  that  this  surveillance  soon  degenerated  into  a 
jealous  and  vexatious  espionnage,  and  led  to  acrimonious 
recrimination,  to  such  an  extent  that  the  workshop  be- 
came a  perfect  hell,  and  that  in  order  to  render  the  life 
there  supportable  and  to  re-establish  harmony,  the 
associated  tailors  were  compelled  to  return  to  piece-work. 
This  attempt,  made  at  a  time  when  sentimentality  reigned 
supreme,  helps  us  to  form  an  opinion  of  the  value  of 
mutual  control,  in  securing  efficiency  of  labour  under  a 
collectivist  system  of  national  production. 

Schaffle  strives  with  much  ingenuity  to  minimise  the 
faults  which  he  feels  are  inherent  in  the  doctrines  he 
advocates  ;  he  eulogises  a  system  of  rewards  for  meritorious 
workshops,  and  is   prepared    to   approve  of  inequality  of 


182  SOCIALISTIC  PLAGIARISMS 

wages — a  concession  he  thinks  is  rendered  necessary  by 
the  varying  demands  for  different  kinds  of  commodities — 
although  this  is  a  reason  which  would  by  no  means  be 
approved  of  by  socialists  in  general.  Indeed,  all  the 
proposed  expedients,  whilst  their  practical  effect  would 
be  insignificant,  sin  against  the  spirit  of  collectivism.  To 
give  prizes  for  collective  excellence  of  work  is  no  more 
logical  or  justifiable  than  the  bestowal  of  rewards  upon 
individuals  for  personal  merit ;  again,  to  make  the  wages 
of  a  workman  depend  upon  the  efficiency  of  his  fellow- 
labourers,  or  to  vary  in  accordance  with  the  fortuitous 
fluctuations  of  demand,  would  be  destructive  to  the 
harmony  of  the  collectivist  doctrine.  If  it  is  found 
necessary  to  borrow  part  of  the  existing  social  organisa- 
tion, why  not  adopt  the  whole  ?  If  a  system  of  unequal 
remuneration  depending  upon  the  fluctuations  of  the 
market  and  quite  irrespective  of  ability  and  efficiency  is 
to  be  conceded,  why  object  to  inequality  of  profit?  In 
point  of  fact,  many  of  the  suggestions  made  by  reasonable 
and  moderate  collectivists  are  merely  plagiarised  from 
the  existing  social  system ;  but  they  are  so  inadequate 
and  so  imperfectly  adapted,  that  their  effect  would  be 
insignificant,  and  the  defect — that  individual  initiative  and 
spontaneous  voluntary  effort  would  be  altogether  wanting 
in  a  collectivist  society — would  be  unaffected.  Another 
question,  of  equal  importance,  still  remains  to  be  con- 
sidered :  How  would  progress  and  improvement  be 
secured  ?  Under  the  existing  system,  all  men  of  intel- 
ligence whose  minds  are  not  altogether  absorbed  in  the 
cares  of  daily  life — all  men  who  have  a  taste  for  science, 
for  the  arts,  for  philanthropy,  or  who  are  ambitious ;  even 
those  who  are  greedy  for  personal  enjoyment — are  keen  to 
secure  means  to  enable  them  to  satisfy  their  desires,  and 
in  so  doing  are  unconsciously  but  incessantly  occupied  in 
furthering  the  progress  of  civilisation.  If  in  any  depart- 
ment of  human  activity  a  man  thinks  he  has  made  a 
discovery  or  has  invented  something,  he  makes  use  of  the 
means  he  possesses  to  develop  it  at  his  own  risk ;  if  he 
has   no  capital,  he    endeavours    to    persuade    others    to 


"OMMIARQUES"  183 

undertake  it,  and  it  is  but  seldom  that  an  inventor  fails 
to  find  someone  who  will  undertake  the  risk  of  developing 
his  ideas. 

The  history  of  progress  demonstrates  two  things  :  first, 
that  it  originates  always  in  the  spontaneous  action  of 
individuals ;  and  secondly,  that  the  sentiment  of  those 
engaged  in  any  calling  is  opposed  to  innovation.  The 
copyists  who  demolished  the  printing-presses  and  the 
sailors  who  destroyed  the  first  steamships  are  examples  of 
this  spirit.  Popular  education  has  not  altered  this  feeling ; 
so  recently  as  1844  the  Parisian  workmen  demanded  that 
a  tax  should  be  levied  upon  machines  equivalent  to  the 
value  of  the  labour  they  would  economise.  In  the  same 
way,  the  fixed  routine  of  a  collectivist  system  would  be 
always  hostile  to  progress,  and  would  hamper  and  dis- 
courage the  initiative  of  the  individual,  which  now  is 
incited  by  the  great  prizes  which  reward  the  successful 
inventor  and  by  the  love  of  speculative  enterprise  inherent 
in  human  nature.  But  apart  from  these  subjective  con- 
siderations the  elastic  organisation  of  existing  society 
facilitates  the  development  of  discoveries  and  inventions, 
since  under  its  regime  everybody  has  absolute  freedom  of 
choice  of  calling,  and  if  he  can  obtain  the  necessary  capital 
is  quite  at  liberty  to  organise  any  enterprise,  or  to  produce 
whatever  he  pleases. 

No  impartial  person  can  deny  that  collectivism  would 
be  immeasurably  more  unfavourable  to  the  initiation  and 
development  of  improvements  than  the  existing  system. 
From  the  individualistic  point  of  view,  the  removal  of  some 
of  the  most  powerful  incentives  for  exertion  would  greatly 
weaken  the  activity  of ,  the  human  mind,  whilst  the 
development  of  discoveries  and  improvements  of  all  kinds 
would  be  beset  with  great  difficulties.  Little  or  no  atten- 
tion would  be  paid  to  individuals  acting  spontaneously 
without  an  official  mandate,  and  the  chief  officials,  upon 
whom  Fourier  bestows  the  ingenious  and  suggestive  name 
of  "  ommiarques,"  would  take  care  that  no  change  was 
introduced  without  their  approval.  Professional  freedom 
would   have  disappeared,  and   private   capitalists,  always 


184  RED  TAPE 

ready  to  incur  risk  for  a  sufficiently  attractive  chance  of 
profit,  would  have  ceased  to  exist. 

To  initiate  an  improvement  or  develop  an  invention, 
it  would  not  suffice  to  convince  a  few  persons  of  its 
advantages  :  the  vis  inertics  of  red-tapism  and  professional 
prejudices  would  have  to  be  overcome;  the  inventor 
would  have  to  deal  with  numerous  officials  and  committees 
of  the  administration  ;  in  fact,  he  would  have  to  conciliate 
the  whole  bureaucracy!  His  task  would  indeed  be 
herculean !  In  the  face  of  these  formidable  obstacles, 
nine-tenths  of  all  useful  inventions  would  be  lost,  the 
progress  of  humanity  would  be  seriously  retarded,  and  the 
continuous  improvement  which  now  goes  on  in  the  method 
of  production  would  cease,  with  the  inevitable  result  that 
the  price  of  all  commodities  would  be  increased. 


CHAPTER  V 

Distribution  under  a  collectivist  regime.  Social  labour-time  as  a 
standard  of  value.  Labour  cheques.  Usury  and  private  trading. 
Choice  of  domicile.  Relations  of  a  collectivist  state  with  other 
countries.     International  trade. 

It  has  now  been  made  clear  that  collectivism  would  be 
unable  to  provide  a  satisfactory  system  of  national  pro- 
duction; and  that  the  three  following  consequences 
would  follow  on  the  establishment  of  this  regime: — (i)  The 
suppression  of  free  individual  determination  of  require- 
ments, or,  in  other  words,  of  personal  liberty;  (2)  The 
absence  of  any  guide  for  the  necessary  control  of  produc- 
tion ;  and  (3)  The  retardation  or  complete  cessation  of 
industrial  and  agricultural  improvements,  which  would 
result  from  the  substitution  of  bureaucratic  pedantry  and 
arbitrary  regulations  for  the  elastic  and  active  organism 
which  now  exists,  and  which  is  the  product  of  individual 
initiative,  of  competition,  of  the  freedom  of  choice  of 
profession,  and  of  private  capital. 

It  remains  to  be  seen  whether  collectivism  will  appear 
to  more  advantage  as  an  agency  for  dealing  with  the 
distribution  of  wealth.  This  is  the  object  which  writers 
who  extol  the  collectivist  system  have  more  especially  in 
view,  and  this  it  is  which  is  the  chief  source  of  their 
influence  with  the  populace.  The  collectivist  doctrine, 
however,  offers  no  better  prospect  of  success  in  arranging 
for  a  satisfactory  distribution  of  wealth  than  for  its 
production. 

Collectivists    insist    upon    the    dissimilarity   of    their 

185 


186  COLLECTIVIST  PRIZES 

doctrine  to  that  of  communism,  which  presupposes  the 
periodical  division  of  property  and  the  absolute  equality 
of  all.  Collectivism  would,  they  say,  find  a  place  for 
inequality  (without  which  no  human  society  could  exist), 
and,  according  to  Schaffle,  would  also  allow  of  a  moderate 
degree  of  personal  comfort ;  it  would  institute  prizes  for 
collective  excellence  in  workshops  or  associations,  and 
would  even  allow  of  the  recognition  and  reward  of 
individual  excellence.  The  problem  is  how  to  reconcile 
the  inequality  which  would  then  inevitably  appear,  and 
which  would  affect  both  individuals  and  groups  of  indi- 
viduals, with  a  system  under  which  the  state  would  be 
the  only  producer. 

"  The  community  would  be  the  owner  and  renewer  of 
all  instruments  of  production  ;  it  would  be  the  universal 
capitalist."^  No  private  capital,  however  insignificant, 
would  exist,  and  as  the  sole  and  universal  producer,  the 
state  would  have  to  distribute  the  product,  including  the 
necessaries  of  life.  The  difficulties  of  such  distribution, 
made  with  the  assistance  of  official  statistics,  have  already 
been  pointed  out.  At  the  present  time,  the  state  finds  it 
difficult  enough  to  provision  an  army  corps  or  even  a 
brigade  when  mobilised,  and  a  remarkable  improvement 
in  state  administration,  as  well  as  a  complete  change  in 
the  bureaucratic  mind,  would  have  to  take  place  before  the 
distribution  of  the  national  produce  in  accordance  with 
the  requirements  and  necessities  of  the  people  could  be 
successfully  organised. 

Since  there  would  be  only  one  producer,  mistakes 
would  no  longer  be  rectified  automatically  as  at  present, 
and  errors  would  be  practically  irreparable. 

The  system  would  also  involve  immense  waste,  far 
exceeding  any  economy  which  might  be  effected  by  the 
abolition  of  shops  with  their  costly  appointments,  of 
advertising,  and  of  all  the  various  expenses  incurred  by 
private  industry  in  the  pursuit  of  business.  The  mistakes 
which  the  state  would  inevitably  make,  in  attempting  to 
distribute  to  each  of  its  citizens  his  portion  of  the  national 
'  SchafHe,  op.  cit.^  p.  65. 


WOULD  THRIFT  SURVIVE?  187 

produce,  would  be  numerous  and  their  result  disastrous ; 
but  the  question  whether  capital  and  thrift  could  exist  at 
all  under  a  collectivist  regime,  is  of  even  greater  import- 
ance. At  present  the  increase  in  the  wealth  of  a  com- 
munity is  caused  by  the  free  and  spontaneous  thrift  of 
its  people  under  the  influence  of  three  sentiments  :  namely, 
the  anxiety  to  provide  for  old  age,  personal  and  family 
ambition,  and  the  desire  of  manufacturers  to  establish 
a  sinking  fund  for  the  amortisation  and  renewal  of  their 
plant.  Of  these  incentives  to  thrift,  the  second,  which  is  by 
far  the  most  powerful,  would  be  completely  suppressed ; 
the  first  would  be  recognised,  but  in  an  altered  form  ;  and 
the  third,  if  it  existed  at  all,  would  do  so  under  severely 
restricted  conditions. 

Schaffle  speaks  highly  of  the  guarantees  which  collec- 
tivism would  offer  to  thrift,  but  since  under  this  regime  no 
instruments  of  production  would  belong  to  an  individual, 
and  since  money  would  be  suppressed,  it  is  clear  that  the 
thrift  to  which  he  refers  would  be  nothing  more  than  the 
right  to  state  support  in  old  age,  which  would  be  acquired 
by  each  individual  under  a  collective  regime ;  but  thrift 
such  as  this  would  add  nothing  to  the  national  wealth. 

Under  the  existing  economical  system,  a  certain  kind 
of  national  thrift  is  common  amongst  civilised  peoples : 
such  works  as  public  highways,  harbours,  etc.,  apart  from 
the  redemption  of  public  debt,  represent  collective  savings 
of  considerable  importance.^ 

Can  it  be  supposed  that  it  would  be  possible  to 
collectivise  the  habit  of  saving,  so  that  it  could  satisfac- 
torily replace  the  individual  thrift  which,  in  a  great 
country  such  as  France,  increases  the  national  wealth  by 
a  sum  of  from  two  to  two  and  a  half  milliards  of  francs 
annually?  Collectivists  hope  that  such  a  change  might 
be  successfully  accomplished. 

"  The  only  part  of  the  national  produce  not  distributed 
generally,  would  be  that  which  was  reserved  by  the  public 
overseers  of  production  and  the  bodies  representing  public 

^  See  Traits  de  la  science  des  finances  and  La  repartition  des 
richesses,  by  P.  Leroy  Beaulieu. 


188  NATIONAL  SAVING 

departments,  partly  for  keeping  up  the  supply  of  collective 
capital,  and  partly  for  the  maintenance  of  other  not 
immediately  productive,  but  generally  useful,  institutions 
— in  fact,  the  public  departments  by  which,  in  the  long 
run,  all  citizens  benefit.  This  portion,  the  most  direct  form 
of  taxation  in  kind,  being  subtracted  before  any  distribu- 
tion of  private  incomes  was  effected,  would  take  the  place 
of  the  existing  taxes,  and  be  used  for  the  common  benefit 
and  as  the  permanent  stock  of  the  collective  capital.  In 
one  passage  Marx  expresses  this,  roughly,  somewhat  as 
follows  : — 

*  The  total  product  is  a  social  product.  Part  of  this 
product  serves  to  replace  used-up  capital  as  a  means  of 
production  :  it  remains  social.' "  ^ 

According  to  these  passages,  the  collectivist  state  would, 
at  any  rate,  maintain  the  existing  wealth  by  replacing  all 
that  is  consumed  in  the  process  of  production ;  it  would 
even  go  further,  and  before  distributing  the  products  to 
individuals,  it  would  retain  an  amount  sufficient  not  only 
to  maintain,  but  to  increase,  the  national  wealth. 

It  is  with  good  reason  that  Schaffle  describes  this 
collective  saving  as  a  "  tax  " ;  the  very  name  suggests  the 
difficulty  there  would  be  in  maintaining  a  high  rate  of 
saving.  Many  states  already  devote  large  sums  to  the 
redemption  of  national  debt ;  but  even  the  largest  amount 
thus  employed,  is  quite  insignificant  in  comparison  with 
the  private  savings  of  a  great  country.  The  larger  portion 
of  this  saving  is  due  to  a  minority,  probably  a  small  one, 
of  the  citizens,  who  possess  the  qualities  of  foresight,  of 
devotion  to  family,  or  of  self-denying  ambition,  and  who 
have  sufficient  force  of  character  to  withstand  the  tempta- 
tions of  every-day  life,  whilst  the  majority  either  save 
nothing,  or  a  quite  inconsiderable  amount.  It  must  be 
remembered  also  that  the  management  of  the  collectivist 
state  would  be  in  the  hands  of  this  unthrifty  majority.  It 
would  be  impossible  for  these  people  suddenly  to  alter  their 
improvident  habits,  and  thus  the  savings  of  a  collectivist 
state  would  inevitably  be  far  less  than  the  sum  now  saved, 
'  Schaffle,  op.  cit.,  pp.  29,  30. 


A  LAW  OF  DISTRIBUTION  189 

It  is  no  good  answer  to  this  statement  to  say  that  the 
reason  why  the  majority  do  not  save  is  because  they  have 
not  the  means ;  it  is  because  they  have  not  the  inclination ; 
in  fact,  amongst  the  most  thrifty  citizens  are  to  be  found 
peasants  with  very  small  holdings,  workmen  whose  wages 
are  moderate,  and  employees  with  small  salaries,  whilst 
those  who  receive  the  highest  wages  frequently  save 
nothing.  Collectivism,  therefore,  would  be  far  less  efficient 
than  the  existing  system  in  securing  the  increase  of 
national  capital. 

The  weakest  point  in  the  proposed  system  is,  perhaps, 
that  upon  which  the  hopes  of  its  advocates  are  chiefly 
founded — namely,  the  distribution  of  the  national  wealth. 
In  considering  this  question,  it  will  be  convenient  to  divide 
it  into  two  parts :  first.  What  would  be  the  social  laws 
for  regulating  distribution  ?  and  secondly,  How  would  they 
be  put  in  operation  ? 

First,  with  regard  to  the  social  law. — Our  attention 
must  not  be  confined  to  such  vague  formulas  as,  "  to  each 
according  to  his  wants,"  or  "to  each  in  accordance  with 
his  ability  as  evidenced  by  his  work."  The  vagueness  of 
these  formulas  is  their  condemnation,  when  they  are 
considered  in  relation  to  so  well-defined  and  positive  an 
organisation  as  that  of  existing  society.  A  nebulous 
intellect  like  that  of  Louis  Blanc  might  rest  contented 
with  these  empty  maxims,  but  they  are  irreconcilable 
with  economic  organisation.  To  be  workable,  a  law 
of  distribution  must  be  clear  and  precise,  and  must 
be  capable  of  being  applied  without  failure  and  without 
tyranny. 

In  a  collectivist  society  wages  and  profit  will  disappear, 
and  will  be  replaced  by  the  social  recompense  for  work 
earned  by  each  producer ;  clearly,  therefore,  it  must  be 
the  state  that  must  settle  the  amount  of  this  reward. 
The  question  at  once  arises  as  to  the  principle  upon 
which  this  will  be  determined.  On  the  one  hand,  the 
collectivist  state  quite  rightly  refuses  to  be  bound  by  a 
rule  of  absolute  equality  in  fixing  the  amount ;  on  the 
other,  it  would  clearly   be   disastrous   if  it   were   to   be 


190  LAW  AS  YET  UNDISCOVERED 

guided  by  caprice.  Social  recompense,  under  various 
names,  such  as  interest  or  profit,  is  at  present  determined 
by  the  laws  of  demand  and  supply,  or  by  the  result  of 
enterprise ;  when  these  have  been  suppressed,  the  supply 
of  labour-force  will  remain,  but  the  demand  will  come 
from  one  employer  only,  who  will  also  be  the  sole  owner 
of  all  means  of  production.  How  can  distribution  be 
regulated  under  this  absolute  monopoly? 

Notwithstanding  the  assertions  of  collectivists,  the 
formulas  of  Marx,  and  the  tentative  suppositions  of 
Schaffle,  no  law  of  distribution  is  discoverable  in  their 
system.  They  are  continually  contradicting  each  other, 
and  the  more  candid  amongst  them  timidly  confess 
that  they  have  discovered  no  such  law.  They  begin 
by  clinging  to  Marx'  theory  of  value ;  but  when  they 
appreciate  the  effect  of  its  practical  application,  they 
find  themselves  compelled  to  abandon  it.  It  will  be 
remembered  that,  according  to  this  theory,  the  "value" 
of  an  object  is  to  be  measured  by  the  average  time  of 
socially  organised  labour  required  to  produce  it. 

"  Social  labour-time  as  standard  of  value !  To  most 
readers  this  idea  will  be  unintelligible ;  many  will  scarcely 
even  have  heard  of  it.  Nevertheless,  this  idea  forms 
theoretically,  in  the  strictest  sense,  the  basis  of  socialism. 
It  has  already  taken  deep  root  in  socialistic  thought,  and 
Karl  Marx  expressly  declares  that  his  treatment  of  labour 
as  the  substance  and  standard  of  value  is  the  corner-stone 
of  his  whole  system."  ^ 

If  on  examination  this  corner-stone  should  turn  out  to 
be  insecurely  placed,  or  should  prove  to  be  compounded  of 
heterogeneous  substances  imperfectly  united,  then  the 
whole  edifice  of  collectivism  must  collapse. 

According  to  this  theory,  says  Schaffle,  "  the  *  substance 
of  value '  of  products  lies  in  the  labour  which  is  '  socially 
necessary,'  by  which  they  are  produced.  The  products 
are  defined  as  *  embodied  labour,' '  congealed  labour- time,' 
a  '  congelation  of  labour.'  But  it  is  not  any  casual  private 
labour  that  determines  the  value,  but  the  socially  necessary 
^  Schaffle,  op.  cii.,  p.  8i. 


SOCIAL  LABOUR-TIME  191 

labour^  i.e.,  labour  of  such  a  kind  as  must  be  on  the  average 
expended  according  to  the  existing  national  standard  of 
technique  for  a  unit  of  supply,  in  order  to  produce  the 
commodity  to  the  whole  extent  of  the  demand  for  it.  If, 
for  instance — (we  may  exemplify  Marx'  theory  in  this 
way) — a  country  has  need  of  20,000  hectolitres  of  wheat, 
and  for  the  production  of  it  100,000  days  of '  social  labour ' 
(labour  capable  of  competition,  or,  ultimately,  labour 
included  in  the  socialistic  organisation)  must  be  expended 
upon   it,  it  would  follow  that  the  socialistic  value  of  a 

TOO  000 

hectolitre  would  be  '■ —  =five  days  of  socially   deter- 

20,000  ^  ^ 

mined  individual  labour.  This  value  would  have  to  hold, 
even  if  individuals  were  found  improvident  enough  to 
produce  the  hectolitre  at  the  cost  of  ten  or  twenty  days 
of  individual  labour.  If  we  imagined  all  the  species  of 
products  which  are  being  continually  produced  valued  by 
the  expenditure  of  social  labour  as  verified  by  experience, 
we  could  find  by  addition  the  total  of  social  labour-time 
which  is  required  for  the  social  total  demand.  We  will 
assume  that  this  sum  amounts  to  300  million  days  of 
socially  organised  labour,  or,  at  eight  hours  a  day,  2400 
million  hours  of  socialistic  labour.  The  aggregate 
product  of  all  commodities,  at  present  directed  by  compet- 
ing capital,  but  eventually  by  unified  public  management, 
would  also  have  a  total  value  of  2400  million  hours  of 
labour,  exactly  as  many  hours  as  are  actually  spent  in 
work   by    i    million   workers  in   the  year.     The  hour  of 

labour of  the  yearly  collective  labour  of  all, 

2,400,000,000  ^        ^  ' 

would  be  the  common  standard  of  value,  of  which  value 

2400  million  nominal  units  could  be,  and  would  have  to  be, 

distributed  as  '  labour-certificates '  or  '  labour-cheques '  to 

the  labourers,  in  order  that  they  might  claim  from  the 

public  depots   the    aggregate   product   of  the    collective 

labour.     The  total  sum  of  labour  for  the  period  would  be 

about  equivalent  to  the  total  value  of  the  produce  for  the 

same   period.     The  economic   bureaus   would   credit  the 

work    done,    fix    the    value    of    the    produce   according 


192  INEQUALITY  DUE  TO  LOCALITY 

to  the  average  standard  of  cost  in  social  labour-time, 
which  would  be  known  to  them  by  this  very  process 
of  keeping  the  labour-accounts,  pay  out  cheques  to 
individuals  on  their  labour  credits,  and  against  these 
cheques  deliver  the  products  at  the  rate  fixed  by  the  social 
labour-cost. 

"  Nothing  appears  simpler  than  the  harmony  of  this 
socialistic  demand  to  make  enjoyment  proportional  to 
labour,  and  to  apportion  to  each  his  full  value  for  his 
labour,  or  return  for  his  labour,  as  his  private  income,  as 
*  true  private  property,'  to  establish  universally  absolute 
property  and  income  founded  on  the  individual's  own 
'  labour,'  and  to  cut  off  the  abstraction  of  the  '  surplus 
value '  by  a  third  party."  ^ 

This  theory,  which  appears  so  simple,  consists,  strictly 
speaking,  in  a  comparison  of  the  cost  of  two  similar  objects, 
or  the  relative  amount  of  wages  which  men  working  at  the 
same  trade  ought  to  receive;  even  thus  restricted,  this 
method  of  distribution  would  be  found  to  be  inadequate 
in  many  cases,  and  the  illustration  given  by  Schaffle 
himself  contradicts  and  condemns  the  theory.  Is  it  true 
that  a  hundred  hectolitres  of  wheat  would  require  an  equal 
amount  of  "socially  organised  labour"  in  all  places? 
Would  not  the  labour  required  on  the  rich  plains  of  the 
department  of  the  Nord  be  one-half,  or  less  than  one-half, 
of  that  necessary  to  produce  lOO  hectolitres  of  wheat  on 
the  plateaux  of  the  Cevennes,  the  Alps,  or  the  Pyrenees  ? 
If  the  average  time  of  "socially  organised  work" 
employed  in  producing  this  amount  of  wheat  is  taken  as 
the  measure  for  fixing  remuneration,  the  agricultural 
labourer  on  the  plains  of  Flanders  would  be  paid  in 
excess  of  his  desserts  and  of  his  actual  requirements, 
whilst  the  labourers  on  the  central  plateaux  would  be 
paid  too  little.  This  difficulty  would  not  be  confined  to 
agriculture :  it  would  exist  equally  in  the  case  of  mines ; 
far  less  labour  may  be  necessary  to  win  a  ton  of  mineral 
in  one  mine  than  in  another,  and  thus,  in  this  case  also, 
such  a  method  of  fixing  wages  would  give  advantages 
»  Schaffle,  op.  cit.,  pp.  82-84. 


PROFIT  AND  WAGES  WILL  DISAPPEAR    193 

to  some,  and  inflict  injustice  on  others.  The  restricted 
definition  of  "value"  given  by  Marx  is,  in  fact,  the 
cause  of  the  original  mistake  made  by  collectivists. 
The  essential  element  in  the  value  of  an  object  is  not, 
and  cannot  be,  the  social  work  required  for  its  pro- 
duction, and  cannot  be  calculated  with  mathematical 
accuracy ;  other  elements  must  be  taken  into  account, 
such  as  the  difference  of  value  due  to  diversity  of  natural 
conditions  and  to  the  incessant  variation  in  human 
requirements  according  to  season  and  locality. 

Marx'  formula,  shown  to  be  incorrect  in  the  case  of 
one  class  of  products,  loses  all  meaning  when  an  attempt 
is  made  to  apply  it  to  a  multitude  of  objects  of  different 
kinds,  to  workmen  of  different  trades,  or  to  those  in 
different  branches  of  the  same  trade.  The  diversity 
of  human  vocations,  which  is  indispensable  to  civilisation, 
is  incompatible  with  this  "simple"  law. 

We  see,  then,  that  work-time  socially  organised  can 
never  constitute  a  satisfactory  basis  for  a  law  of  distri- 
bution. Under  the  existing  system,  it  is  the  value  of 
the  social  service  rendered  by  one  person  to  another 
which  determines  the  rate  of  remuneration ;  the  time 
occupied  often  has  but  little  to  do  with  it,  it  may  be  one 
of  the  elements,  but  the  quality  of  the  work,  and  especially 
the  frequently  changing  "  utility-value "  of  products,  are 
considerations  which  must  be  taken  into  account  in  the 
determination  of  "  value."  Schaffle  endeavours  to  enlarge 
Marx'  narrow  formula,  but  he  is  unfaithful  to  the  doctrine 
of  the  master  when  he  writes  that  "this  collective 
method  of  production  would  remove  the  present  com- 
petitive system,  by  placing  under  official  administration 
such  departments  of  production  as  can  be  managed 
collectively  (socially  or  co-operatively),  as  well  as  the 
distribution  among  all  of  the  common  produce  of  all, 
according  to  the  amount  and  social  utility  of  the  produc- 
tive labour  of  each  ; "  ^  and  again,  when  he  says  that  under 
collectivism  profits  and  wages  will  have  disappeared,  and 
that  then  there  will  only  be  "  a  publicly  assigned  income, 

'  Schaffle,  op.  cit,  p.  4. 

N 


194  APPEARANCE  OF  INEQUALITY 

uniformly   arising  from   labour,  and   proportioned   to   its 
quantity  and  social  utility."^ 

In  the  face  of  these  contradictory  statements,  precision 

of  definition   disappears.     The   conception   of   work-time 

"  socially   organised "   as   a    measure    of   value,  although 

narrow  and  restricted,  is  at  any  rate  precise,  and  to  some 

extent  explicit;  but  by  connecting  with   it   the   idea  of 

"  values-of-utility,"    Schaffle   destroys   all  that  is  founded 

upon   it.     If   work-time   were   to   be   taken   as    being    a 

mathematically  exact  expression,  and  if  each  man  were 

to  be  paid  by  the  day  or  the  hour,  we  should  then  have 

a  law  of  distribution  which,  although  it  would  be  clumsy, 

inadequate,  and   hostile   to  civilisation,  would   still   be   a 

law.     It  is  true  that  under  such  a  law  the  engineer,  the 

mechanic,  the  manual  labourer,  and  the  rag-picker,  would 

all  be  paid  at  the  same  rate ;  in  fact,  the  better  artisans 

would  be  paid  at  a  lower  rate  than  the  others,  because 

the   more   skilled   labour   is,  the   greater   the   intellectual 

strain  and  the  less  it  can  endure  long  hours  of  work.     But 

however  faulty  such  a  law  might  be,  we  should  at  any  rate 

understand  what  it  is  that  collectivists  propose.     The  most 

infatuated  of  their  members,  however,  refuse  to  take  the 

words  work-time  socially  organised  in  a  purely  literal  sense  ; 

but  then  what  becomes  of  the  law?     If  regard  is  paid  to 

the  quality  of  the  work  and  to  its  "social  utility-value," 

the    administration    would    infallibly    be     of    the     most 

arbitrary  nature.     It  would  be  imperatively  necessary  to 

classify  workmen  and  to  draw  up  a  scale  of  wages :  this 

would  soon  give  rise  to  differences  of  social  rank,  and  a 

system  of  graduated  social  inequality,  decreed  by  law  and 

enforced  by  officials,  would  soon  become  established.     The 

ingenious     and     ingenuous     Schaffle    acknowledges    and 

struggles   against   these    difficulties,   but   they   are    quite 

ignored  by  Marx. 

Social  work-time  being  admittedly  defective  as  a  means 
of  measurement,  the  special  value  due  to  time  and  place  of 
manufacture   and  to  the  agency  of  capital  must  be  con- 
sidered.     Wages   and  prices  must  necessarily  vary  even 
'  Schaffle,  op.  cit,  p.  29. 


A  POST-SCRIPTUM  196 

when  the  work-time  remains  unchanged.  In  fact,  the 
general  rule  would  be  violated  whenever  an  attempt  was 
made  to  apply  the  measure  to  a  particular  case.  Schaffle 
is  driven  almost  to  despair,  and  he  candidly  confesses  that 
Marx'  theory  is  incapable  of  supplying  a  satisfactory  law 
for  distribution — an  admission  which  destroys  the  whole  of 
the  doctrine.  The  remarkable  passage  in  which  this 
avowal  is  made  has  already  been  quoted.^  The  important 
question  is  not  whether  collectivism,  in  order  to  establish 
itself,  would  proceed  by  force  or  by  persuasion,  but 
whether  it  is  capable  of  providing  any  satisfactory  law  for 
the  distribution  of  wealth.  Schaffle  admits  that  so  far  no 
such  law  has  been  proposed ;  the  omission  is  one  which 
cannot  be  repaired,  since  it  is  caused  by  imperfections 
inherent  in  the  doctrine,  which  cannot  be  extirpated  or 
modified.  This  avowal  made  by  Schaffle  is  still  further 
accentuated  in  the  course  of  his  book : — "  Therefore  the 
socialistic  value  '  exchange-value '  must  not  be  determined 
only  by  cost,  but  also  at  the  same  time  by  the  varying  *  use- 
value  ' :  otherwise,  socialistic  demand  and  supply  would  fall 
into  a  hopeless  quantitative  and  qualitative  discrepancy 
which  would  be  beyond  control.  Socialism  itself  ought  to 
attempt  to  place  this  point  (which  has  been  up  to  now  dis- 
regarded by  its  theorists)  beyond  all  doubt  at  the  earliest 
possible  moment."  ^ 

This  omission,  however,  is  owing  not  to  neglect,  but  to 
impotence :  when  private  industry  and  commerce,  free 
demand  and  supply,  the  flexible  and  automatic  control 
exercised  by  *  price,'  the  variation  of  profits  and  possibly 
of  wages  also,  are  all  suppressed,  no  law  of  distribution 
can  be  devised  other  than  the  barbarous  one  of  universal 
equality. 

In  a  note  with  an  added  post-scriptuniy  Schaffle 
unconsciously  but  finally  shatters  the  illusions  of  all  those 
who  believe  that  modern  scientific  socialism  is  a  system 
which  offers  a  clearly  defined  solution  of  social  questions. 
To  avoid  any  possibility  of  misrepresentation,  this  note  and 
the  post-scriptum  are  here  given.     After  referring  to  the 

[1  Vide  supra,  p.  i8o.]  2  Schaffle,  op.  cit.,  p.  87. 


196  THE  DETERMINATION  OF  EXCHANGE- VALUE 

idea  that  socialistic  theorists  had  disdained  to  elucidate 
the  conception  of  "value"  with  sufficient  precision,  Schaffle 
adds :  "  This  was  attempted  several  times  in  the  year  1877 
in  Vorwdrts,  in  the  criticism  on  the  Quintessence  of 
Socialism.  This  paper  gives  to  Marx'  idea  of  *  socially 
necessary  labour-time '  a  significance  which  includes  in  the 
idea  of  the  '  socially  necessary '  what  I  call  '  use-value.' 
By  itself  I  have  no  contention  to  make  against  this 
explanation,  since  it  recognises,  at  least  in  principle,  the 
necessary  influence  of  the  varying  demand  in  determining 
the  '  exchange-value '  on  which  I  laid  stress.  Yet,  per 
contra,  I  am  forced  to  make  two  observations : — Firstly, 
that  I  am  not  yet  able  to  consider  my  conception  of 
Marx'  idea  of  socially  necessary  labour-time  incorrect,  for 
Marx  declares  that  commodities  which  contain  '  an  equal 
quantity  of  labour,  or  which  can  be  produced  in  the  same 
time,'  are  of  equal  value.  Secondly,  I  must  remark  that, 
if  Marx  agrees  with  the  explanation  in  Vorwdrts,  the 
socially  necessary  labour-time  would  become  useless  as  a 
practical  standard  for  the  determination  of  value,  on- 
account  of  the  forcible  insertion  into  the  quantum  of  .social 
labour-cost  of  an  entirely  independent  second  factor  in  the 
determination  of  exchange-value,  viz.,  the  social  value-in- 
use.  I  leave  it  undecided  whether  Marx  recognises  the 
explanation  of  his  theory  of  standard  value  as  stated,  and 
content  myself  with  maintaining  that  social  labour-cost 
and  demand,  both  independent  and  separate,  must  be 
brought  to  bear  on  the  determination  of  exchange- value  in 
every  economic  epoch. 

"  Postscript. — Herr  Schramm's  latest  explanation  of  the 
probable  meaning  of  Marx'  theory  of  value  in  Vorwdrts 
(1877,  No.  128)  ought  to  be  examined.  Herr  Schramm 
thinks  'that  he  is  able  to  say,  in  agreement  with  his 
entire  party,'  that  '  socialism  does  not  seek  or  perceive 
any  standard  for  division  in  Marx'  theory  of  value.'  If 
that  is  the  case,  the  dispute  has  no  raison  cTetre" ^ 

A  clear  light  is  thus  thrown  upon  the  questions,  and 
we  see  that  it  is  not  only  this  controversy,  but  the  so-called 
'  Schiiffle,  op.  cit.,  pp.  88-89  {note). 


THE  LIBERAL  PR01T.SSI0NS  197 

scientific  socialism  itself,  which  is  a  mockery.  Here  is  a 
social  system  of  which  the  principal,  it  might  almost  be 
said  the  only,  object  is  to  modify  the  system  of  distribution 
of  wealth  in  civilised  nations.  Its  most  illustrious  repre- 
sentative elaborates  a  formula  which  is  apparently 
precise ;  his  disciples  discuss  it,  and  come  to  the  con- 
clusion that  it  is  altogether  inadequate,  and  not  capable 
of  practical  application,  or  that,  if  put  in  force,  its  effect 
would  be  to  produce  violent  and  fatal  economic  disasters — 
in  fact,  that  it  would  bring  about  a  reversion  to  chaos. 
Alarmed  by  these  consequences,  which  are  so  obvious, 
they  consider  the  formula  from  every  point  of  view,  but 
are  finally  compelled  to  own  that  it  contains  no  workable 
method  for  the  distribution  of  wealth.  But  since  the 
re-distribution  of  wealth  is  the  principal  object  of  col- 
lectivism, and  if,  as  is  here  admitted,  it  can  provide  no  way 
of  attaining  it,  of  what  use  is  Marx'  doctrine?  It  becomes 
merely  a  means  whereby  the  simple  may  be  deceived,  and 
a  trick  for  the  use  of  those  who  exploit  the  credulity  of 
the  public. 

The  liberal  professions,  essentially  necessary  both  for 
human  progress  and  for  the  adornment  of  civilisation,  are 
another  cause  of  embarrassment  to  socialists.  To 
suppress,  if  not  lawyers,  at  any  rate  doctors,  scientists, 
artists,  and  literary  men,  or  to  transform  them  into  mere 
functionaries  of  the  state  performing  their  allotted  tasks 
under  official  regulation,  would  be  to  bring  about  the 
decay  of  civilisation.  The  better  educated  collectivists, 
who  are  anxious  that  intellect  should  retain  some  influence 
in  the  society  of  the  future,  endeavour  to  arrange  for  the 
preservation  of  the  liberty  which  is  at  once  the  attraction 
and  the  strength  of  these  professions,  and  which,  indeed, 
is  almost  a  necessity  of  their  existence. 

"  Social  services  which  by  their  nature  cannot  be 
centralised,  being  personal  services  (those  of  the  physician, 
the  artist,  and  others),  might  even  be  left  to  the  com- 
petition of  private  payment  (by  means  of  the  transferable 
labour  cheques  of  the  customers) ;  or,  private  payment 
in  these  professions  might  be  combined  with  the  already 


198  THE  PROCESS  OF  DISTRIBUTION 

existing  system  of  public  salaries  for  attendance.  This 
kind  of  private  interest  of  the  individual  in  his  social 
calling  in  the  region  of  personal  services  is  quite  con- 
ceivable in  all  cases  where  capital  plays  no  conspicuous 
part  in  the  service  rendered."  ^ 

In  another  page  he  returns  to  the  subject : — "  If,  for 
instance,  it  were  urged  that  because  the  nation  has  also 
national,  communal,  educational,  church,  and  other 
necessities  in  common,  therefore  the  individual  could  not 
receive  the  whole  value  of  his  work  in  collective  products, 
this  would  only  apparently  be  accurate.  Suppose  that 
from  the  products  of  the  300  million  socialistic  labour- 
days  even  one-third,  i.e.,  the  value  of  icx)  million  labour- 
days,  had  to  be  deducted  to  provide  for  the  public 
expenditure,  no  doubt  there  would  only  remain  products 
to  the  socially  estimated  value  of  200  million  labour-days. 
But  the  consequence  of  this  would  merely  be  that,  for  the 
performance  of  one  labour-hour,  a  cheque  for  only  two- 
thirds  would  be  drawn,  the  third  third  going  for  the 
common  enjoyment  of  the  public  property,  being,  as  it 
were,  a  kind  of  tax,"  ^ 

This  leads  us  to  the  consideration  of  the  mechanical 
process,  as  distinguished  from  the  law  of  distribution  ;  the 
latter,  as  we  have  see,  is  not  to  be  found  in  the  collectivist 
system,  and  as  to  the  former,  the  difficulty  of  successful 
working  would  be  extreme.  Currency,  which  is  sacrificed 
by  collectivists,  but  which  in  the  shape  of  coin  has  the 
great  merit  of  possessing  intrinsic  value,  due  to  the  labour 
required  to  produce  it  and  to  its  incapability  of  indefinite 
increase,  provides  a  solid  basis  for  commercial  transactions, 
whether  domestic  or  international.  What  substitute  could 
be  found  for  currency  in  external  commercial  relations,  is 
a  subject  which  is  apparently  of  no  interest  to  collectivists : 
in  domestic  transactions  money  is  to  be  replaced  by 
cheques  representing  the  typical  work-day.  "  Produce 
would  be  served  out  on  behalf  of  society  in  exchange  for 
certificates  drawn   on   the   store  account  department   by 

^  Schaffle,  op.  cit.,  pp.  49-50. 
2  Ibid.,  85, 86. 


THE  WEAKEST  POINT  199 

the  labour  account  department,  and  set  off  against  the 
person's  balance  on  his  labour  account,  or,  as  might 
occasionally  happen,  set  off  by  way  of  advance  against 
future  earnings. 

"  Reckonings  between  the  bodies  entrusted  with  the 
collective  production  and  the  consumers  (who  have  credit 
for  productive  labour)  would  have  to  be  made,  without 
money,  according  to  labour-time  and  value  of  labour-time, 
by  a  process  of  adjusting  balances  through  the  public 
administrative  bureaus  and  clearing-houses. 

"  In  the  other  quality,  as  standard  of  value,  money 
would,  in  the  socialistic  state,  be  replaced  by  the  average 
labour-day,  by  which  the  value  of  the  products  would  be 
estimated  and  on  division  be  reckoned.  Also,  as  a  means 
of  judicial  assessment,  the  normal  social  work-day  would 
be  the  unit  of  value."  ^  But  if  the  labour-cheques  and  the 
products  do  not  balance,  or  if  there  is  any  mistake  in  the 
accounts — if,  in  consequence  of  the  unavoidable  deteriora- 
tion of  certain  products,  or  owing  to  excessive  demand  in 
some  one  branch,  there  is  a  deficiency  of  commodities  in 
relation  to  the  labour-cheques  presented  in  payment  for 
the  goods  required — how  could  such  mistakes  be  remedied  ? 
At  the  present  time,  the  simple  machinery  of  "price" 
re-establishes  equilibrium  before  any  inconvenience  is  felt ; 
but  when  "  price  "  has  disappeared,  or  is  arbitrarily  fixed, 
what  means  will  then  exist  for  maintaining  equilibrium 
between  demand  and  supply  ?  There  can  be  none.  The 
whole  collectivist  system  of  distribution  finally  depends 
upon  the  determination  of  a  maximum  price  for  com- 
modities by  authority ;  but  this  maximum  must  necessarily 
vary — a  condition  which  will  tempt  administrators  to 
adopt  corrupt  practices,  or  expose  them  to  the  suspicion 
of  having  done  so.  The  question,  therefore,  which  by 
Schaffle's  admission  is  almost  vital — namely,  that  of  the 
distribution  of  provisions — remains  unanswered.  The  pro- 
posed mechanical  process  is  of  no  more  value  than  the 
non-existent  law ;  and  it  is  with  good  reason  that  Schaffle 
writes,  with  reference  to  this  point,  "  that  it  is  the  weakest 
1  Schaffle,  op.  city  pp.  79,  80. 


200  DANGER  OF  LABOUR-CHEQUES 

and  most  obscure  in  the  socialist  programme."  This  is  so 
obviously  true  that  no  reasonable  man  would  dare  to 
recommend  such  a  system,  and  no  nation  which  still 
retained  a  particle  of  prudence  could  abandon  itself  to 
an  experiment  of  so  obscure  and  indefinite  a  character. 

To  conclude  the  examination  of  the  system  of  social 
organisation  proposed  by  collectivists,  reference  must  be 
made  to  the  probable  effect  it  would  have  upon  thrift, 
inheritance,  inequality  of  social  conditions,  individual 
liberty,  and  international  relations.  Imprimis,  by  what 
rules  would  consumption  be  controlled,  and  how  would  the 
supply  be  guaranteed  ?  We  are  told  that  articles  of  con- 
sumption would  be  obtained  by  means  of  labour-cheques 
paid  in  exchange  for  them  in  the  public  shops.  This  plan 
could  not  fail  to  cause  serious  complications,  as,  for 
instance,  if  the  supply  of  commodities  in  the  shops  was 
insufficient  to  meet  the  demand — a  contingency  which  in 
the  absence  of  free  private  trade  would  inevitably  be  of 
frequent  occurrence ;  it  is  needless,  however,  to  dwell 
further  upon  this  point,  which  has  already  been  dealt 
with. 

Money,  in  the  shape  of  coin,  which  itself  is  of  intrinsic 
value,  is  to  be  abolished  on  the  ground  that  its  existence 
would  make  an  immoderate  acquisition  of  wealth  practic- 
able. It  is  to  be  seen  whether  labour-cheques  would  not 
be  open  to  the  same  objection.  They  have  an  inherent 
defect  in  that  they  cost  nothing  to  produce,  and  this  must 
always  make  their  use  a  source  of  danger.  An  essential 
condition  of  value  is,  that  to  possess  it  commodities  must 
not  be  capable  of  indefinite  increase  without  cost ;  but  no 
such  limitation  would  restrict  the  issue  of  labour-cheques ; 
a  few  workmen  with  an  engraved  plate  and  a  supply  of 
paper  could  produce  them  to  any  extent,  and  the  only 
safeguard  would  be  unceasing  and  vigorous  supervision, 
which,  in  view  of  the  vast  number  of  cheques  required, 
it  would  be  extremely  difficult  to  make  efficient 

We  are  assured  that  the  total  number  of  labour-cheques 
issued  would  be  exactly  equivalent  on  the  one  hand  to  the 
number  of  days  worked  by  the  labourers,  and  on  the  other, 


A  SYSTEM  OF  RATIONS  201 

to  the  total  national  production,  calculated  in  terms  of 
work-days.  Apart  from  the  possibility  of  errors  caused 
by  the  vagueness  of  the  definition  given  by  collectivists  of 
the  term  "  work-day  "  when  used  as  a  basis  of  calculation, 
it  might  easily  happen  that  labour-cheques  might  be  issued 
in  excess  of  the  amount  of  products,  or  of  the  provisions 
in  the  national  stores.  In  this  case,  famine  could  only  be 
avoided  by  putting  the  people  upon  strictly  limited  rations. 
The  trouble  might  be  only  local — confined  to  a  certain 
district,  town,  or  commune — or  it  might  only  affect  a  certain 
description  of  produce,  for  which  the  demand  had  increased  ; 
or,  again,  it  might  be  general,  caused  by  errors  of  calcula- 
tion on  the  part  of  the  central  public  administration,  or  it 
might  arise  from  the  deterioration,  and  consequent  useless- 
nesSjOf  some  portion  of  the  national  products — a  contingency 
which  would  probably  be  both  more  severe  and  more 
frequent  under  a  collectivist  system  than  now,  when,  as 
has  been  pointed  out,  "price"  soon  re-establishes  equili- 
brium between  demand  and  supply ;  under  a  collectivist 
regime,  on  the  contrary,  this  guiding  influence  being  absent 
and  the  cost  of  all  commodities  being  fixed  and  unchange- 
able, except  after  enquiry,  which  would  entail  much  loss  of 
time,  a  failure  of  the  supply  of  necessaries  to  meet  the 
issue  of  labour-cheques  would  involve  serious  consequences, 
which,  as  has  been  said,  could  only  be  met  by  resort  to  a 
system  of  daily  rations.  But  even  if  it  were  possible  to 
avoid  an  actual  crisis,  a  collectivist  regime  would  in  any 
case  be  compelled  to  have  recourse  to  a  system  of  "  rations," 
not  as  an  exceptional  measure,  but  as  the  rule,  and  thus 
would  inevitably  end  in  communism. 

Under  the  proposed  system,  every  one  would  be  given 
labour-cheques  in  proportion  to  the  time  worked,  and 
these  cheques  would  be  presented  in  payment  for  com- 
modities purchased  in  the  national  shops ;  it  would, 
however,  only  be  possible  to  buy  such  articles  as  the  state 
chose  to  manufacture.  What  use  could  be  found  for 
private  wealth  under  such  a  rigime?  Schafifle  mentions 
four  different  ways  in  which  it  might  be  employed — In 
personal,  or  (which  is  the  same  thing)  family  consumption ; 


202    CONTINUANCE  OF  INDIVIDUAL  SAVING  (?) 

in  individual  saving ;  in  repayable  loans  (which,  however, 
would  imply  an  indirect  accumulation  of  wealth);  and 
lastly,  in  gifts.  Anxious  to  accentuate  the  difference 
between  communism  and  collectivism,  he  asserts  that 
collectivism  would  allow  of  the  employment  of  private 
resources  in  all  these  ways.  It  is  obvious,  however,  that 
the  selection  of  objects  for  personal  requirements  might 
be  greatly  restricted,  for  if  the  state  chose  to  produce 
nothing  but  articles  of  prime  necessity,  and  to  suppress  all 
objects  of  luxury,  consumption  could  vary  only  in  quantity 
and  not  in  kind  :  more  might  be  eaten,  or  more  clothes  or 
furniture  purchased,  but  the  quality  of  all  these  things 
would  be  almost  identical.  Schaffle,  it  is  true,  insists  that 
the  privilege  of  private  ownership  of  all  kinds  of  commodi- 
ties— clothes,  furniture,  objects  of  art,  means  of  education, 
etc. — would  be  preserved.  This  might  be  possible  if  the 
state  were  to  regulate  manufactures  in  such  a  way  that  in 
addition  to  the  necessaries  of  life,  objects  of  luxury  and 
enjoyment  would  also  be  produced ;  but  for  reasons  which 
will  be  explained  further  on,  this  would  necessarily  lead  to 
the  development  of  inequality  of  social  conditions. 

Collectivists  who  still  retain  some  regard  for  the 
dignity  of  humanity  and  for  the  future  of  society  under 
the  regime  of  which  they  are  enamoured,  assert  that  the 
practice  of  individual  saving  would  continue.  No  doubt 
the  kind  of  saving  which  consists  in  preserving  for  future 
use  such  commodities  as  are  not  immediately  consumable 
and  are  not  immediately  perishable,  such  as  coal,  wood, 
wine,  etc.,  will  always  continue,  and  in  this  primitive  form 
"thrift"  would  exist  under  the  most  severe  rigime ;  it 
is  to  be  feared  that  the  "  thrift "  of  which  Schaffle  speaks 
is  of  this  nature.  A  man  of  few  wants  and  much  force  of 
character  might  store  up  labour-cheques,  but  since  interest 
is  not  allowed,  such  saving  would  be  unproductive  and  of 
no  particular  advantage. 

Schaffle  does  not  inform  us  how  collectivism  would 
deal  with  the  aged ;  but  it  is  obvious  that  in  view  of  the 
fraternal  sentiments  upon  which  the  doctrine  insists,  they 
would  not  be  left  to  destitution,  or  as  a  charge  upon  their 


THE  SO-CALLED  "IDLERS'*  203 

neighbours ;  they  would  certainly  be  provided  for,  and  in 
all  probability  those  who  had  saved  nothing  would  be 
treated  as  well  as  the  provident.  What,  then,  would  be  the 
use  of  personal  saving?  Possibly  it  might  add  some 
comforts  to  the  pension  provided  by  the  state ;  but  since 
the  collective  state,  in  virtue  of  its  principles,  would  be 
compelled  to  give  assistance  upon  a  generous  scale,  and 
also,  since  superfluous  luxuries  would  not  be  likely  to 
be  produced,  the  inducement  to  private  saving  would 
be  small  indeed,  and  with  the  suppression  of  individual 
thrift,  society  would  lose  one  of  the  strongest  aids  to 
progress. 

The  same  may  be  said  of  inheritance,  which  Schaffle 
says  would  be  permitted.  Inheritance  is  not  merely  a 
private  right :  it  is  a  social  power ;  it  may  be  said  to 
enlarge  and  extend  the  life  of  the  individual,  who  is 
thereby  encouraged  to  continue  and  increase  his  efforts 
beyond  what  would  be  adequate  for  the  necessaries  and 
pleasures  of  his  own  short  life.  The  desire  of  a  man  to 
provide  for  his  children  is  the  most  effectual  corrective  for 
want  of  energy ;  and  whatever  may  be  said  about  the  idle- 
ness and  folly  of  spendthrifts  or  vicious  inheritors  of 
wealth,  the  loss  and  misery  thus  caused  is  of  very  small 
importance  in  comparison  with  the  enormous  increase  of 
products  and  of  capital,  which  is  the  direct  result  of  the 
principle  of  inheritance. 

It  must  also  be  remembered  that  the  leisure  of  these 
so-called  idlers  is  often  occupied  by  intellectual  work  or  by 
intelligent  participation  in  and  direction  of  enterprises 
that  make  for  progress.  Even  those  who  have  no  direct 
heirs  generally  conform  to  the  habits  of  work  and 
economy  which  the  custom  of  inheritance  has  made  usual 
in  modern  society.  In  his  desire  that  this  custom  should 
be  maintained,  Schaffle  fails  to  perceive  that  in  the 
restricted  form  in  which  alone  it  could  continue,  it  would 
be  the  pernicious  elements  of  inheritance  only  which 
would  be  retained  ;  the  heir,  instead  of  position  and  power, 
with  their  attendant  duties  and  responsibilities,  would 
inherit  nothing  but  the  means  of  personal  enjoyment,  and 


204    THE  POSITION  OF  PROFESSIONAL  MEN 

this  custom,  which  has  so  largely  contributed  to  the  pro- 
gress of  humanity,  would  become  a  source  of  corruption. 

Collectivists  are  apparently  satisfied  that  the  substitu- 
tion of  labour-cheques  for  coined  money  would  effectually 
prevent  a  reversion  to  inequalities  of  social  condition. 
Speculation,  private  enterprise,  the  stock  exchange,  money, 
private  rents,  and  private  capital,  would  all  be  done  away 
with.  Who  can  doubt  that  under  these  changed  conditions 
social  inequality  would  be  thoroughly  eradicated  ?  Schaflfle 
triumphantly  asserts  that  this  would  happen ;  but  as  he 
does  not  wish  that  the  "bourgeoisie"  should  be  expro- 
priated without  compensation,  he  would  grant  them  "  une 
richesse  suffocante  de  moyens  de  consommation " — a 
plethora  of  the  means  of  consumption — for  a  limited  period, 
say,  for  seventy-five  to  ninety-nine  years,  in  exchange  for 
their  wealth,  and  has  to  admit  that  during  this  transitional 
period  "  inequality  "  would  continue  to  exist  to  a  certain 
extent.  But  whether  the  expropriation  were  effected  in 
this  way  or  by  confiscation,  social  inequality  would  soon 
reappear,  as  it  always  has  done  under  all  systems  expressly 
devised  to  eradicate  it ;  its  roots  are  buried  too  deep  in 
human  nature  to  make  it  possible  to  tear  it  out  without 
destroying  humanity  itself.  Collectivism,  as  described  by 
Schaffle,  would  offer  many  openings  for  its  re-establish- 
ment, of  which  the  liberal  professions  would  be  one. 
Collectivist  ideas  on  this  subject  are  hazy,  and  Schaffle 
does  not  appear  to  be  altogether  sure  whether  the 
members  of  these  professions  ought  to  become  public 
functionaries  recompensed  by  official  salaries,  or  whether 
they  should  remain  independent,  as  at  present ;  but  he 
appears  to  favour  the  latter  system.  However  this  might 
be,  a  democratic  organisation  of  society,  and  the  general 
diffusion  of  knowledge,  constitute  the  most  favourable 
conditions  possible  for  the  accumulation  of  wealth  by  men 
of  exceptional  talent  in  these  professions,  and  it  would  be 
impossible  to  prevent  social  inequality  arising  from  this 
cause. 

Labour-cheques,  again,  would  offer  another   and  still 
easier  opening   for  the  reappearance  of  inequality;  with 


REAPPEARANCE  OF  PRIVATE  TRADE      205 

these  cheques  in  existence,  no  prohibition  or  penalty  could 
prevent  the  gradual  re-establishment  of  banking  and 
interest.  Usury  was  strictly  forbidden  during  the  middle 
ages,  but  it  silently  won  its  way,  in  defiance,  or  by  the 
evasion,  of  all  prohibitory  regulations.  Although  the 
receipt  of  interest  would  be  illegal,  yet  persons  who  had 
saved  labour-cheques  would  find  they  could  readily  lend 
them  to  others  temporarily  in  want  of  them;  in  return 
for  the  loan  they  would  exact  interest,  and  the  law  would 
be  powerless  to  stop  the  practice.  The  honour  and  the 
conscience  of  the  borrower  would  urge  him  to  repay  the 
loan  and  interest ;  but  apart  from  this  moral  impulse, 
every  one  who  desired  to  preserve  his  future  credit — that 
is,  his  ability  to  borrow — would  fulfil  his  obligations. 

The  law  cannot  suppress  transactions  which  social 
organisations  of  all  kinds  encourage  and  of  which  human 
reason  approves.  Loans  at  interest  will  always  be  the 
principal  resource  of  those  in  temporary  embarrassment — 
a  resource  which  borrowers  would  be  no  more  ready  to 
abandon  than  lenders ;  indeed,  it  is  the  borrower  that  has 
the  chief  interest  in  the  maintenance  of  the  practice,  and 
a  would-be  borrower  will  always  be  found  in  every  society ; 
but  without  "  interest "  there  would  be  no  lenders.  It  has 
been  shown  in  a  preceding  chapter  how  usury  appeared 
and  spread  in  the  small  collectivist  societies  of  the 
Russian  Mirs.^ 

Again,  in  defiance  of  all  possible  regulations,  inequality 
would  reappear  in  the  form  of  private  trade.  Although 
all  purchases  would  legally  have  to  be  made  in  the 
national  shops,-  and  no  person  would  be  permitted  to 
buy  goods  from  his  neighbour,  it  is  certain  that  the  more 
energetic  members  of  society,  with  the  connivance  of  the 
more  inert,  would  in  the  long  run  establish  a  complete 
system  of  illicit  trade.  How  would  it  be  possible  to 
prevent  an  economical  person  who  had  saved  some  labour- 
cheques  and  who  foresaw  that  certain  goods  were  likely 
to  rise  in  price,  from  buying  and  storing  them,  and  selling 
them  when  the  expected  rise  occurred  at  a  price  somewhat 
•  See  suproy  p.  41  ^/  seq. 


206  FUNDAMENTAL  CAUSES  OF  INEQUALITY 

lower  than  that  charged  in  the  national  shops?  Such 
opportunities  would  be  sure  to  occur,  and  Schaffle  has 
shown  how  impossible  it  would  be  to  maintain  fixed 
prices  for  articles  subject  to  variations  of  supply  and 
demand.  However  severe  the  regulations  might  be,  it 
would  be  impossible  to  suppress  this  private  commerce. 
Thus,  in  a  contraband  trade  in  goods,  in  secret  loans  of 
labour-cheques  at  interest,  and  in  the  large  payments 
which  eminent  specialists  could  exact,  there  would  be 
three  potent  causes  which  would  soon  lead  to  the  re- 
establishment  of  inequality  of  social  conditions. 

The  fundamental  causes  of  inequality  are  :  superiority  in 
energy  or  in  ability,  greater  sobriety,  foresight,  economy, 
and  greater  perspicacity  in  speculation.  Collectivism  could 
not  suppress  these  qualities,  it  could  only  endeavour  to 
block  the  channels  for  their  employment ;  in  this 
attempt,  however,  it  could  never  quite  succeed,  and 
inequality  of  social  condition  could  never  be  entirely 
suppressed. 

Schaffle  does  his  utmost  to  show  that  collectivism  does 
not  require  or  even  admit  of  periodic  redistribution  of 
property  ;  but  even  if  this  did  take  place,  inequality  would 
not  entirely  disappear :  it  would  always  exist  during  the 
interval  between  the  partitions,  and  there  would  be  many 
opportunities  for  fraud  and  dissimulation,  by  which  the 
effect  of  each  recurring  partition  might  be  minimised  or 
nullified.  Incessant  redistribution,  as  well  as  the  ration- 
ing of  each  individual  day  by  day,  and  meal  by  meal, 
would  be  necessary  to  maintain  equality,  and  even  then, 
unless  human  liberty  were  so  effectually  garotted  as  to 
render  it  incapable  of  movement,  inequality  would  re- 
appear. What  personal  freedom  could  be  retained  under 
such  a  system  ? 

As  we  have  seen,  the  freedom  of  choice  of  articles  of 
consumption  would  necessarily  disappear.  What  would 
happen  to  those  other  forms  of  personal  liberty,  which 
constitute  the  superiority  of  civilised  society  over  barbar- 
ism, such  as  the  free  choice  of  profession,  of  work,  and  of 
domicile?     It  cannot  be  seriously  contended   that   they 


FREEDOM  OF  CHOICE  OF  DOMICILE        207 

could  survive.  Schaffle  speaks  of  the  freedom  of  choice 
of  domicile  as  being  that  form  of  public  right  which  con- 
fers upon  the  labourer  liberty  to  seek  work  wherever  the 
highest  wages  are  attainable.^  This  definition,  however, 
is  far  too  narrow,  since  in  selecting  their  domicile,  men  are 
influenced  by  many  causes  other  than  the  one  referred  to ; 
however  that  may  be,  freedom  of  domicile  presupposes 
as  essential  conditions,  a  free  choice  of  dwelling  and  of 
profession.  In  the  middle  ages  choice  of  domicile  was 
not  unfettered,  chiefly  because  labour  was  not  free;  the 
adscription  of  the  peasant  to  the  soil,  and  the  close 
corporations  of  trade  guilds  in  the  towns,  made  change  of 
domicile  practically  impossible  for  the  generality  of  men. 
These  difficulties  would  be  greatly  exaggerated  under  a 
collectivist  rigime ;  even  Schaffle,  whose  desire  is  always 
to  present  this  doctrine  in  the  most  favourable  light,  says : 
"  All  hiring  of  dwelling-houses  would  be  excluded ;  for  in 
the  socialist  community  there  would  necessarily  be  a  pro- 
found repugnance  against  the  payment  to  individuals  of 
so-called  'ground  rents'  (rents  for  the  better,  or  better 
situated,  sites  and  houses),  against  which  a  proclamation 
was  directed  in  Basle  ten  years  ago.  Moreover,  it  is 
impossible  to  bring  stability  and  regularity  into  the 
popular  dwellings  system,  unless  it  is  protected  from  the 
choking  growth  of  rent,  and,  by  the  action  of  society, 
organically  and  systematically  treated  with  reference  to 
the  locality  of  employment."^ 

It  is  all  very  well  for  Schaffle  to  declare  elsewhere  in 
his  book,  that  liberty  of  domicile  might  possibly  be 
retained ;  the  exigencies  of  the  system  are  more  potent 
than  his  kindly  aspirations,  and  it  is  obvious  that  liberty 
of  domicile  could  not  exist,  since  for  anyone  to  change 
his  habitation,  it  would  be  necessary  for  him  to  obtain  an 
order  for  a  new  domicile  from  the  state,  the  sole  proprietor. 
Every  privilege  has  its  price  which  must  be  paid,  and  the 
cost  of  liberty  of  choice  of  domicile  is  rent.  When  this 
exists  no  longer,  and  the  state  provides  a  house  or  lodging 
gratis,  the  individual  would  be  as  closely  bound  to  his 
'  Schaffle,  op.  cit,  p.  91.  '  Ibid.,  pp.  66,  67. 


208  COMPETITION  PROTECTS  THE  WORKMAN 

domicile  as  an  oyster  to  its  shell.  When  a  soldier  wishes 
to  exchange  into  another  corps,  he  has  first  to  obtain  the 
consent  of  his  colonel ;  next,  he  must  find  some  soldier  in 
the  corps  he  wants  to  join  willing  to  exchange  with  him ; 
then,  if  the  colonels  of  both  regiments  approve,  the 
exchange  can  be  effected.  Under  the  coUectivist  regime, 
anyone  desiring  to  change  his  domicile  would  have  to 
take  similar  steps :  collectivism  would,  in  fact,  substitute 
a  military  regime,  with  its  rigorous  discipline,  for  all  the 
existing  civil  liberties.  The  destruction  of  individuality 
would  be  the  inevitable  result  of  such  a  system,  and 
the  position  of  the  labourer  under  it  would  be  worse 
than  that  of  the  serf  of  the  middle  ages ;  for  the  latter, 
though  liable  to  "  dimes "  and  to  "  forced  labour,"  had, 
at  any  rate,  possession  of  his  own  field,  and  days  on 
which  he  was  free  to  work  for  himself,  of  which  rights 
collectivism  would  deprive  him.  If  now  a  workman 
falls  out  with  his  foreman,  if  he  is  unpopular  and  ill- 
treated  by  his  fellows,  he  can  change  his  situation  or 
adopt  another  calling  ;  but  what  resource  would  he  have 
when  all  employers  but  one  have  disappeared?  To 
change,  he  would  need  the  authorisation  of  the  state 
as  represented  by  his  immediate  superior,  or  possibly 
the  assent  of  the  majority  of  the  members  of  his  work- 
shop might  be  necessary — either  way,  permission  could 
only  be  obtained  as  an  act  of  grace,  as  in  the  case  of 
a  soldier  wishing  to  change  his  corps.  Is  it  possible 
to  feel  any  confidence  that  the  officials  who  would 
represent  the  one  universal  employer  would  show  no 
favouritism  in  the  distribution  of  tasks,  in  the  approval 
or  condemnation  of  work,  and  in  the  fixing  of  wages, 
or  that  there  would  be  no  tyranny  or  persecution? 
To-day  the  competition  between  employers  acts  as  a 
safeguard  against  these  abuses ;  the  greater  the  number 
of  employers  in  any  industry,  the  more  highly  the 
workman  is  valued,  and  the  more  complete  is  his 
freedom ;  competition  is,  in  fact,  the  protector  of  the 
labourer.  Huge  shops  and  great  companies  have  not 
destroyed   his  liberty,  since   if  competition   fails   in   one 


FOREIGN  RELATIONS  209 

locality,  it  exists  elsewhere.  In  our  modern  organisa- 
tion, one  trade  is  often  so  similar  to  another,  that  to 
pass  from  the  one  to  the  other  is  by  no  means  impossible : 
for  example,  an  engineer  or  a  stoker  can  find  employment 
in  many  different  branches  of  industry.  The  custom  of 
changing  service  is  now  so  common  and  locomotion  is  so 
cheap,  that  even  when  there  is  only  one  employer  in  a 
district,  he  is  no  longer  the  only  resource  for  the  men  he 
employs.  To  have  but  one  employer  for  all  trades,  and  in 
all  places,  would  impose  an  odious  thraldom  upon  the  wage 
earner,  from  which  there  would  be  no  escape ;  it  is  no 
answer  to  this  indictment  to  say  that  the  authorities  to 
whom  he  would  be  subject  would  themselves  be  the  elect 
of  the  public  of  which  he  forms  a  part,  since,  as  has  been 
already  explained,  strict  impartiality  cannot  be  expected 
from  men  who  only  represent  a  majority  of  the  whole 
electorate,  and  who  would  therefore  be  naturally  inclined 
to  favour  their  own  side. 

Another  question  of  vital  importance,  is  that  of  the 
foreign  relations  of  a  country  organised  upon  a  collective 
system.  These  would  be  affected  in  three  ways :  first,  by 
interference  with  the  free  course  of  trade ;  secondly,  by  the 
absence  of  any  fixed  basis  of  exchange,  such  as  is  now 
afforded  by  metallic  money ;  and  lastly,  by  the  temptations 
offered  to  powerful  nations  to  take  advantage  of  the 
economic  position  of  their  neighbours,  created  by  a  collec- 
tivist  regime. 

In  the  event  of  a  deficiency  of  any  of  the  necessaries  of 
life — such  as  bread — a  nation  could  not  live  without  the 
assistance  of  other  countries.  Under  existing  circumstances 
this  is  readily  supplied  through  the  agency  of  international 
trade,  which,  thanks  to  the  action  of  private  enterprise,  is 
carried  on  with  the  utmost  regularity,  under  a  system  of 
free  private  commerce,  which  possesses  the  vast  superiority 
which  must  always  attend  the  automatic  compared  with 
the  volitional  performance  of  vital  functions.  Difficulties 
between  states  must  occasionally  arise,  especially  when 
treaties  of  commerce  or  tariffs  are  the  subjects  of  discus- 
sion ;  but  these  treaties  only  affect  a  limited  number  of 

O 


210  INTERNATIONAL  BARTER 

commodities,  chiefly  manufactured  articles.     The  greater 
part  of  imported  goods,  such  as  raw  materials,  and  particu- 
larly food  stuffs,  pass  in  either  duty-free  or  are  subject  to 
charges  which  are  moderate  and  but  seldom  altered.     But 
if  the  state  were  the  sole  producer,  the  difficulties  attend- 
ing  arrangements   for   international   exchange  would   be 
greatly   increased — they  would,  indeed,  be   almost  insur- 
mountable,  and   would  reach   a   culminating  point,  if  all 
states  were  organised  on  a  collectivist  system.     A  purchase 
of  cotton,  pork,  or  petrol,  made  by  France  in  the  United 
States,  would  be  a  government  operation,  and  would  thus 
be   a  matter  for  diplomatic  negotiation  ;  it  would  be  the 
same  with  coffee  from  Brazil,  with  wool  from  Australia,  or 
coal   from    England.     The   mere    technical    difficulty    of 
finding  conditions  for  barter  satisfactory  to  both  parties 
would   be  enormous.     Modern  cosmopolitan   trade  meets 
the  difficulty  arising  from  the  insufficiency  of  means  of 
direct  exchange  between  two  countries,  when  one  imports 
largely  from,  but  exports  little  to  the  other,  by  means  of 
drafts  upon  third  countries  ;  but  this  means  of  adjustment 
would   no   longer   be   available,  and    its    absence  would 
immeasurably    increase     the    difficulty     of   international 
commerce.     Since  metallic  money,  the  present  standard  of 
exchange,  would  be  abolished,  how  would  it  be  possible  to 
arrange  for  the  payment  of  international  accounts  when,  as 
must  frequently  happen,  the  direct  barter  of  commodities 
was   for  some   reason  impracticable?     The  settlement  of 
accounts   between   states    organised   upon    a    collectivist 
system   would   thus  inevitably  become   a  fertile  cause  of 
disputes  and   difficulties.     There  would  always  be  a  risk 
that  the  two  governments  might  fail  to  arrange  terms  of 
exchange,   and    seeing   the   length    of    time   (sometimes 
amounting  to  years)  it  takes  to  conclude  a  treaty  of  com- 
merce under  existing  conditions,  we  can  readily  understand 
how   greatly  this   delay    might    be   increased   when   the 
quality   and   quantity    of  commodities  required  by  each 
government,  and  the  value  of  merchandise  to  be  given  in 
exchange,   are   all   made  subjects    of  direct   negotiation. 
Claims  made  on  account  of  defective  quality,  or  for  loss, 


FOREIGN  EXCHANGES  ^11 

would  then  assume  a  grave  importance ;  disputes  which 
nowadays  are  decided  by  courts  of  law,  would  then  be 
subjects  of  international  discussion,  likely  to  lead  to 
recrimination,  possibly  to  war!  But  it  would  be  im- 
possible to  provide  against  this  difficulty  by  retaining  the 
use  of  the  money  standard  for  international  trade,  and  at 
the  same  time  proscribe  its  domestic  use :  this  standard 
would  necessarily  be  abolished  under  collectivism,  and  its 
suppression  would  be  followed  by  hopeless  anarchy. 

The  present  system  of  foreign  exchanges  and  inter- 
national stock-markets,  which  is  made  possible  by  the 
existence  of  a  money  standard,  also  greatly  assists  the 
development  of  international  commerce,  and  provides  a 
solid  basis  for  its  operations.  The  course  of  foreign 
exchange — that  is,  the  varying  rate  payable  on  bills  of 
exchange  or  orders  for  payments  between  nations — acts  as 
a  guide  for  cosmopolitan  trade,  and  it  is  by  this  means 
that  one  nation  discovers  it  is  buying  too  much  from 
another,  or,  on  the  contrary,  that  it  might  buy  more  with 
advantage ;  but  with  the  disappearance  of  money  and 
private  trade,  this  invaluable  guide  would  be  lost.  Inter- 
national stock-markets  provide  a  convenient  means, 
especially  at  a  time  of  crisis,  for  adjusting  the  balance  of 
accounts  between  nations  :  this  also  would  disappear,  since 
all  bonds  and  shares  would  be  abolished.  Is  it  possible  to 
imagine  France  proposing  to  pay  her  debts  to  other 
countries  with  labour-cheques  ? 

We  see,  then,  that  the  substitution  of  negotiations 
between  governments  for  those  between  private  merchants, 
would  destroy  both  the  solid  basis  and  the  unfailing 
mechanism  which  now  sustain  international  trade,  and 
would  make  the  rapidity  of  action,  which,  in  the  case  of 
threatened  famine  would  be  so  essential,  impossible. 
These  children  of  a  larger  growth  who  call  themselves 
"  scientific  "  socialists,  have  detected  none  of  these  diffi- 
culties !  Not  one  amongst  them  even  alludes  to  a  question 
of  such  grave  importance  as  that  of  the  international 
relations  between  coUectivist  states:  not  even  Schaffle, 
with  his  usually  perspicuous  intellect,  shows  any  apprecia- 


212  THE  DANGER  OF  WAR 

tion  of  the  insurmountable  difficulties  and  dangers  which 
confront  collectivism  from  this  quarter. 

Another  natural  consequence  of  the  establishment  of 
their  system,  which  has  also  escaped  the  superficial  observa- 
tion of  Marx  and  his  disciples,  is  the  temptation  that 
would  be  offered  to  international  cupidity.  At  the 
present  time,  many  of  the  inhabitants  of  nations  that  are 
prolific  but  poor,  or  whose  land  is  unfertile,  emigrate  to 
less  populous  or  richer  countries ;  this  free  and  continuous 
interfiltration  maintains  economic  equilibrium  between 
nations,  and  although  it  may  occasionally  cause  internal 
difficulties,  it  works  satisfactorily  on  the  whole.  What 
would  be  the  attitude  of  collectivist  governments  towards 
this  question?  Would  they  exclude  all  strangers,  as  is 
probable,  or  would  they  receive  them  ?  In  either  case, 
the  responsibility  of  the  state  would  be  greatly  increased, 
and  the  menace  of  war  would  be  always  present. 

Collectivism  would  justify  the  spoliation  of  wealthy  but 
unprolific  by  poor  and  populous  nations,  since  its 
principles  cannot  be  restricted  in  their  application,  and 
the  doctrine  logically  demands  that  all  humanity,  regarded 
as  an  economic  entity,  shall  participate  equally  in  the 
advantages  of  collectivity.  The  poorest  nations  would 
have  a  right  to  their  share  of  the  richest  land :  for 
national  property  rests  upon  the  same  principles  as 
private  property.  If  the  latter  is  unjustifiable,  so  also  is  the 
former.  The  only  ground  upon  which  nations  are  justified 
in  resisting  invasion,  is  the  right  derived  from  long 
possession  and  improvement  of  the  soil.  But  why  should 
this  title  be  valid  for  a  nation  and  invalid  for  the  indi- 
vidual ?  Why  should  the  French  retain  for  themselves  the 
soil  on  which  they  have  been  settled  for  fifteen  centuries, 
when  they  have  only  72  inhabitants  to  the  square 
kilometre,  whilst  the  Germans  have  over  icx),  and  the 
Belgians  200?  It  is  obvious  that  the  contingency  of 
war  would  be  greatly  increased  if  the  objects  of  populous 
and  powerful  nations,  legitimatised  by  the  principles  of 
collectivism,  were  to  become,  not  a  mere  political  supremacy 
over  their  antagonists,  but  the  actual  occupation  of  their 


DESTRUCTION  OF  NATIONALITIES         213 

land  itself,  with  all  its  industrial  and  agricultural  develop- 
ments. 

We  see,  then,  that  collectivism,  which  cannot  devise 
any  system  for  organising  domestic  economy,  would  be 
equally  unable  to  establish  satisfactory  international 
commercial  relations,  that  it  would  lead  to  the  sacrifice  of 
the  wealthier  to  the  poorer  nations,  and  that  its  principles, 
strictly  carried  out,  would  justify  unceasing  warfare,  and 
end  in  the  common  destruction  of  nationalities  and  of 
civilisation. 


CHAPTER   VI 

Economy  of  labour  under  a  collectivist  system.  Evils  of  competition, 
and  the  remedy  for  them.  Effect  of  general  diffusion  of  educa- 
tion. The  production  of  luxuries.  The  abolition  of  "rentiers." 
Fashion. 

We  have  now  examined  the  positive  side  of  collec- 
tivism, so  far  as  its  features  are  discernible  under  the 
veil  in  which  they  are  shrouded  by  its  expositors. 
Fortunately,  clear  definition  can  be  dispensed  with, 
since  the  system  proposed  by  coUectivists  is  so  simple 
that  the  consequences  of  its  practical  application  are 
easy  to  foresee. 

It  will  be  desirable  to  consider  a  point  to  which 
coUectivists  attach  the  greatest  importance — namely,  the 
economy  which  would  be  secured,  the  toil  which  would 
be  avoided,  and  the  increase  of  leisure  which  would  be 
gained,  by  the  adoption  of  their  proposed  organisation  of 
work  and  distribution  of  products. 

CoUectivists  declare  that  under  our  present  system 
there  is  much  wasted  labour,  and  much  effort  which,  so 
far  as  regards  the  true  well-being  of  humanity,  is  altogether 
futile.  Barren  exertion,  they  say,  takes  the  place  of  produc- 
tive work,  and  industrial  labour  is  diverted  from  its 
proper  object — that  is,  the  production  of  articles  of  real 
utility. 

Under  the  system  they  propose,  idlers,  they  say,  would 
disappear ;  but  even  apart  from  mere  idleness,  how  large 
is  the  amount  of  unnecessary  and  sterile  labour,  such  as 
that  of  members  of  the  stock  exchange,  of  middle  men 
and  intermediaries  generally,  how  excessive  the   number 

814 


THE  PRODUCllON  OF  LUXURIES  215 

of  shops,  how  huge  the  cost  of  display  and  advertisement 
Where  one  baker  is  required,  five  or  six  establish  them- 
selves, where  one  or  two  insurance  agents  would  suffice, 
twenty  compete  for  what  they  call  the  "  business " ;  what 
object  is  served  by  the  existence  of  luxurious  shops, 
except  to  gratify  the  eyes  of  the  frivolous? 

How  seriously  is  the  manufacturer  of  useful  objects 
hindered  by  the  production  of  articles  of  fashion.  The 
men  who  find  and  those  who  cut  diamonds,  those  who 
with  laborious  care  construct  luxurious  carriages,  those 
who  weave  the  rich  stuffs  with  which  the  wealthy  cover 
their  furniture  or  decorate  their  wives — all  these  men,  it  is 
asserted,  are  engaged  in  unproductive  labour :  the  object 
of  their  toil  is  merely  the  gratification  of  vanity,  and  thus 
a  great  section  of  industrial  labour  is  productive  in 
appearance  only.  The  number  of  lace  makers  in  France 
is  said  to  be  200,000 ;  embroideries  are  perhaps  equally 
numerous;  and  the  making  of  gloves  can  hardly  be 
described  as  being  a  productive  industry.  Amongst 
men's  industries  also,  we  find  skilled  cabinetmakers  who, 
in  producing  a  luxurious  piece  of  furniture,  employ  a 
hundred  times  the  amount  of  labour  that  would  be 
necessary  to  make  a  useful  wardrobe;  makers  of  rich 
carpets,  of  finely  cut  glass,  and  the  legion  of  superfluous 
servants  with  which  wealthy  parvenus  love  to  surround 
themselves, — is  not  all  the  so-called  "work"  in  which 
these  persons  are  employed  in  reality  a  perversion  of 
human  toil  ?  Even  agricultural  labour  is  some- 
times diverted  from  its  legitimate  object :  if  horses 
were  not  bred  to  draw  the  carriages  of  the  rich,  a 
larger  head  of  cattle  might  be  kept.  The  more  luxuri- 
ous products  are  grown  at  the  expense  of  those  of 
essential  utility :  the  vineyards  of  Chateau  Lafitte 
or  Chambertin  would  yield  three  or  four  times  the 
quantity  of  wine  they  now  produce,  if  the  quality  were 
lowered. 

Thus,  it  is  asserted  that  the  inequalities  of  fortune,  and 
the  habits  to  which  they  give  rise,  cause  a  large  part  of 
national   industry   to   be   sterile,  as   regards   real  human 


216  A  SEDUCTIVE  PICTURE 

requirements.  This  is  the  reason  why,  according  to  Stuart 
Mill,  machinery  has  not  diminished  the  labour  of  a  single 
man.  These  grievous  facts,  however,  serve  to  show  how 
much  might  be  accomplished  by  intelligent  reform,  and 
support  the  collectivist  assertion  that,  without  any  loss  of 
well-being,  the  toil  of  humanity  might  be  halved.  Collecti- 
vists  deny  that  they  desire  to  suppress  taste  and  refinement : 
luxury,  they  declare,  will  continue  under  their  rigime; 
marbles,  gilding,  and  rich  fabrics  will  not  be  proscribed,  but 
will  be  reserved  for  the  decoration  of  public  palaces,  not 
only  in  the  great  cities,  but  also  in  the  provincial  towns  ; 
and  instead  of  churches,  which  the  new  doctrine  condemns, 
the  schools  will  be  the  places  in  which  public  magnificence 
will  be  displayed.  When  thus  reserved  for  the  community, 
objects  of  art  might  be  ten  times  less  numerous,  and  yet 
be  sufficiently  abundant  to  rejoice  the  eyes  and  charm 
the  minds  of  the  public  generally.  The  immense  economy 
of  the  labour,  now  expended  in  vain,  would  go  far  to 
compensate  for  any  inferiority  of  productiveness,  which 
might  in  certain  cases  be  the  effect  of  the  substitution  of 
a  collectivist  for  an  individualist  rigime.  On  this  point 
Schaffle  writes  :  "  The  entire  costly  and  luxurious  organisa- 
tion of  advertisements  and  show-rooms,  with  the  enormous 
rents  of  warehouses,  together  with  wholesale  and  retail 
trade  and  the  sterile  and  parasitic  dealings  of  the  middle 
man,  would  vanish  of  their  own  accord,  together  with 
trade  competition."^ 

Such  is  the  seductive  picture  collectivism  unrolls  before 
our  eyes,  but  Schaffle  discreetly  refrains  from  enlargement 
upon  this  subject,  and  confines  himself  to  some  general 
remarks :  nevertheless,  it  is  in  connection  with  this  part 
of  their  doctrine  that  the  arguments  of  collectivists  are 
the  least  trivial.  The  socialist  Fourier,  whose  exuberant 
imagination  was  allied  with  a  remarkable  power  of  observa- 
tion, long  since  pointed  out  the  defects  of  commercial 
organisation  which  still  prevail,  and  suggested  various 
methods,  some  reasonable  and  some  Utopian,  by  which 
the  distribution  of  wealth  might  be  improved. 
*  Schaffle,  op.  cit.,  pp.  75,  76. 


SUPERFLUOUS  TRADERS  217 

We  agree  with  those  who  hold  that  the  economic 
system  of  the  present  day,  which  is  in  process  of  trans- 
formation from  industry  upon  a  small  to  industry  upon 
a  large  scale,  contains  a  great  deal  of  useless  machinery 
and  functions  which  have  become  superfluous.  In  France 
this  is  often  the  case,  and  public  attention  has  been 
frequently  called  by  the  author  oi  Le  Collectivisme  to  the 
primitive  character  and  antiquated  organisation  of  com- 
merce, to  the  surplusage  of  mechanism,  to  the  wasted 
labour,  and  to  the  insufficiency  of  production  and  con- 
sequent increase  of  prices  which  it  causes.  The  number  of 
middle  men  of  all  kinds  is  certainly  excessive,  and  many 
wholesale  and  partly  wholesale  merchants  might  be 
eliminated  without  causing  the  smallest  inconvenience  to 
society.  The  great  stores  have,  in  certain  trades,  such  as 
clothing  and  furnishing,  already  rendered  invaluable  service 
to  society  by  reducing  the  superfluous  number  of  small 
tradesmen.  In  the  provision  trade,  notably  in  great 
towns,  it  is  the  excessive  number  of  retail  dealers,  such  as 
butchers  and  bakers,  which  raises  the  price  of  provisions, 
and  prevents  the  consumer  from  profiting  by  reductions 
in  the  prices  of  meat  and  of  flour.  Competition,  which  in 
these  trades  is  still  in  a  primitive  stage,  is  anarchic,  and 
increases  cost  in  place  of  lowering  it.  Thus,  the  actual 
cost  of  bread  is,  say,  from  35  to  40  centimes  per  kilo- 
gram, in  place  of  30,  which  it  ought  to  be,  according  to 
the  price  of  flour,  and  the  cause  is  the  excessive  and  con- 
stantly increasing  number  of  bakers.  It  by  no  means 
follows  from  this,  however,  that  it  would  be  either  neces- 
sary or  wise  to  fix  the  price  of  bread  or  meat  officially, 
or  to  restrict  by  law  the  number  of  butchers  or  bakers, 
still  less  to  make  these  trades  a  state  monopoly.  The 
evils  referred  to  are  only  transitory  ;  the  first  result  of 
the  development  of  competition  was  to  induce  an  excessive 
number  of  persons  to  adopt  commercial  pursuits,  and  thus 
to  cause  an  increase  in  the  cost  of  commodities  ;  but  further 
development  will  result  in  the  concentration  of  labour  and 
a  decrease  of  price  ;  and  for  competition  thus  to  complete 
its  work,  all  that  is  necessary  is  liberty  and  experience. 


218  VALUE  OF  ELEMENTARY  EDUCATION 

What  has  already  been  effected  in  special  branches  of 
trade  in  France  by  the  great  shops,  and  for  many  articles 
of  food  consumption  by  the  public  restaurants  known  as 
Bouillons  Duval,  and  by  the  large  co-operative  societies 
in  England,  liberty  and  experience  will  do  in  all  countries ; 
and  society  will  gain,  not  only  by  the  lowering  of  prices, 
but  also  by  the  transference  of  a  large  number  of  able- 
bodied  persons,  who  are  now  hampering  the  mechanism  of 
distribution,  to  the  actual  work  of  production. 

In  this  way,  the  due  proportion  between  the  number  of 
men  employed  in  manufacture  and  the  number  of  those 
whose  only  function  is  to  circulate  or  sell  the  product, 
which  has  of  late  been  somewhat  disturbed,  will  be 
restored  gradually  and  without  any  sudden  shock.  Great 
establishments,  in  place  of  being  blindly  opposed,  ought  to 
be  welcomed  as  efficient  agents  in  the  economic  organisa- 
tion of  social  forces.  The  present  over-crowding  of  the 
commercial  and  liberal  professions  at  the  expense  of 
actually  productive  labour,  arises  in  part  from  a  cause 
which  is  transitory — namely,  the  effect  of  the  sudden 
diffusion  of  elementary  education  amongst  the  masses, 
and  of  higher  education  amongst  the  middle  classes. 
Feelings  which  properly  belong  to  a  bygone  age  still 
survive,  and  still  mislead  men  as  to  the  value  of  acquire- 
ments which  used  to  be  rare,  but  which  are  now  common. 
In  former  days,  a  man  who  had  learnt  to  write  easily  and 
make  a  correct  use  of  language,looked  upon  manual  labour  as 
being  derogatory,  and  one  who  had  received  a  more  liberal 
education  thought  that  the  highest  professions  only  were 
worthy  of  his  abilities.  To-day  these  sentiments  still 
persist,  although  the  reason  for  them — i.e.,  the  rarity  of 
education — has  disappeared  ;  hence  the  discredit  into  which 
manual  labour  has  fallen,  and  hence  the  appalling  number 
of  clerks  and  tradesmen  of  all  descriptions.  Elementary 
education  is  now  of  extremely  small  commercial  value ; 
but  this  fact  has  not  as  yet  been  fully  or  generally  recog- 
nised, and  consequently  habits  have  not  been  altered  in 
conformity  with  the  change.  Two  other  causes  tend  to 
increase  the  disinclination  of  men  to  undertake  useful  and 


THE  WASTE  OF  LABOUR  219 

productive  manual  work,  and  lead  them  to  prefer  callings 
which  are  already  overstocked  :  one  of  these  is  the  novelty 
of  the  democratic  regime,  and  the  other  is  the  constantly 
increasing  diffusion  of  capital. 

Possessed  with  the  idea  of  "  equality,"  every  French- 
man thinks  that  he  has  a  just  claim  to  stand  on  the 
highest  social  level,  and  despises  the  humble  pursuits  to 
which  the  great  majority  of  men  are  born.  He  does  not 
distinguish  between  the  purely  moral  equality,  which 
society  endeavours  more  and  more  to  secure  for  all  its 
members,  and  equality  of  material  conditions.  Without 
being  Utopian,  the  former,  or  something  approaching  it, 
may  be  hoped  for :  the  full  attainment  of  the  latter, 
however,  although  at  some  future  day  it  may  be  more 
nearly  realised  than  at  present,  is  impossible. 

The  increasing  diffusion  of  capital  has  had  a  similar 
effect:  a  considerable  number  of  men  now  possess  from 
50,C)(X)  fr,  to  loOjCXXD  fr.,  and  a  vast  number  of  individuals 
from  8000  fr,  to  20,000  fr.  Formerly  such  men  would  have 
had  an  opening  as  autonomous  workmen  in  small  indus- 
tries ;  these  opportunities  have  now  greatly  diminished, 
but  the  old  sentiment  still  persists,  and,  disdaining 
manual  labour,  either  industrial  or  agricultural,  these  men 
open  small  shops  in  the  town.  Useful  production  is  thus 
deprived  of  labour,  whilst  the  machinery  of  distribution 
becomes  congested.  The  vision  of  great  fortunes  formerly 
made  in  trade,  which  become  rarer  as  the  economic 
organisation  of  society  becomes  more  perfect,  still  continues 
to  exercise  a  fascination  which  increases  the  effect  of  the 
causes  already  described. 

These  are  the  reasons  why,  in  existing  society, 
especially  in  France,  so  much  labour  is  wasted.  No  doubt 
this  must  always  be  the  case  to  some  extent ;  but  as  time 
goes  on,  the  evil  will  grow  less  :  the  man  of  merely  ordinary 
accomplishments  will  gradually  learn  that  his  market 
value  is  but  small,  whilst  the  harsh  conditions  and  constant 
mortifications  to  which  clerks  are  exposed,  will  tend  to 
diminish  the  supply.  It  will  be  the  same  with  the  small 
retail  traders  :  the  impossibility  of  becoming  rich,  or  even 


220  IS  LUXURY  TO  BE  CONDEMNED? 

of  making  both  ends  meet,  will  discourage  many  who  now 
are  tempted  to  make  the  venture ;  little  by  little  sentiment 
and  custom  will  adapt  themselves  to  the  new  social 
conditions;  well-instructed  men  will  resign  themselves  to 
becoming  artisans  or  manual  labourers,  and  education  will 
exert  its  true  influence,  quite  unconnected  with  social 
distinctions,  by  elevating  the  mind,  and  opening  up  new 
sources  of  mental  enjoyment,  and  by  acting  as  a  guide  in 
the  conduct  of  life.  But  unless  of  a  pre-eminent  character, 
education  will  no  longer  be  supposed  to  confer  a  claim  to 
any  function  other  than  that  of  an  ordinary  labourer.  The 
same  may  be  predicted  of  capital;  the  possession  of  a 
moderate  sum  will  cease  to  be  considered,  by  those  who 
possess  it,  as  entitling  them  to  refuse  subordinate  occupa- 
tions ;  and  in  the  future  it  will  be  as  usual  for  young  men 
owning  some  thousands  of  francs  to  become  simple 
workmen,  as  it  is  now  for  those  who  possess  nothing. 

In  this  way,  a  transformation  of  society  will  be  gradually 
and  naturally  effected,  of  far  greater  moral  and  economical 
importance  than  any  which  could  be  brought  about  by 
the  intervention  of  the  state.  The  larger  scale  upon  which 
industry  is  now  established  will  gradually  eliminate  the 
small  traders,  and  will  thus  reduce  the  excess  of  the 
existing  commercial  personnel :  all  that  collectivism  can 
promise  in  this  direction,  is  equally  attainable  under  the 
existing  social  organisation. 

We  come  now  to  the  alluring  promise,  that  under  the 
collectivist  rigime  all  kinds  of  unnecessary  manufacture 
might  be  abandoned,  and  the  labour  of  production  con- 
centrated upon  articles  of  real  utility  to  humanity,  with 
the  result  of  a  large  increase  in  the  quantity  of  these  or 
of  a  considerable  reduction  in  the  hours  of  labour.  A 
large  portion  of  national  produce  consists,  we  are  told, 
of  articles  of  luxury  which,  from  the  point  of  view  of 
social  utility,  may  be  described  as  trash.  Luxury  is, 
indeed,  as  old  as  humanity,  and  in  all  ages  moralists 
and  preachers  have  inveighed  against  it ;  but  the  question 
is  whether,  apart  from  the  temptations  to  moral  trans- 
gressions which   it  offers,  it   is   in  itself  a   thing   to   be 


WHAT  IS  LUXURY?  221 

condemned?  Luxury  brings  variety  into  human  life,  it 
stimulates  taste  and  encourages  efforts  to  rise  to  higher 
conditions  of  life,  and  on  these  grounds  may  claim  its 
acquittal,  even  if  it  sometimes  claims  its  victims  or 
occasionally  becomes  an  offence  and  a  scandal.  The 
fact  that  it  brings  happiness  to  so  vast  a  number,  must 
also  be  set  against  the  injury  it  may  sometimes  cause. 
How  can  a  line  be  drawn  between  legitimate  comfort 
and  luxury?  Are  strawberries  and  peaches  luxury? 
Are  the  grand  crus  of  Bordeaux  to  be  considered 
luxuries,  whilst  the  vins  bourgeois  are  only  reasonable 
comforts?  If  point  d'Alencon  or  Indian  cashmere  are 
luxuries,  are  Calais  tulle  or  French  cashmere  to  be  placed 
in  the  same  category?  An  artistically  carved  piece 
of  furniture  is  incontestably  an  object  of  luxury :  is  the 
commoner  article,  with  its  machine  made  ornaments,  also 
to  be  so  considered  ?  Is  the  chain  of  gold  or  silver  which 
adorns  and  gratifies  the  workman,  and  accustoms  him  to 
pay  more  attention  to  his  personal  appearance,  an 
article  of  luxury  or  not,  and  is  the  labour  expended  on 
its  manufacture  to  be  regretted  and  held  to  be  wasted 
labour  ?  In  the  production  of  all  the  objects  named,  and 
in  numberless  others,  there  is  a  considerable  expenditure 
of  human  labour  which  no  doubt  might  have  been  saved, 
if  production  were  to  be  confined  to  the  supply  of  actual 
physical  necessities. 

Is  the  girl  of  the  working  classes  to  be  forbidden  to  long 
for  a  silk  gown,  or  to  save  her  wages  in  order  to  procure  this 
innocent  gratification?  But  beautiful  designs  or  lovely 
colours  are  superfluous  :  so  far  as  protection  against  cold  is 
concerned,  the  skins  of  beasts,  or  undyed  cloth,  are  all 
that  is  actually  necessary.  The  fact  that  if  men  were 
to  restrict  their  desires  to  filling  their  stomachs,  and 
protecting  themselves  against  heat  and  cold,  and  were 
ready  to  abandon  all  labour  not  absolutely  necessary  for 
this  purpose,  they  would  be  able  to  economise  labour,  is 
no  new  discovery  ;  but  how  many  men  would  desire  to 
live  under  such  conditions?  Who  would  value  leisure 
purchased  by  such  privations  and  involving  such  hopeless 


222  PROUDHON  ON  LUXURY 

monotony!  Clear-sighted  moralists  have  often  said  that 
the  money  spent  by  a  wealthy  man  is  of  far  greater  real 
benefit  to  others  than  to  himself ;  the  sight  of  magnificent 
houses  and  splendid  equipages  give  pleasure  to  the  poor 
who  see  them.  Is  this  an  inhuman  feeling  which  ought 
to  be  proscribed  ?  Is  it  not  rather  a  natural  manifestation 
of  desires  and  aspirations  which  lie  deep  in  the  human 
heart?  Luxury  has  for  centuries  unceasingly  increased 
amongst  the  lower  social  classes :  the  wife  of  a  clerk  or  an 
artisan  now  enjoys  many  comforts  unobtainable  by  the 
great  lords  and  ladies  of  a  bygone  age.  Proudhon  shows 
himself  a  better  philosopher  than  collectivist  rhetoricians, 
when  he  writes :  "  Our  laws  have  not  the  character  of 
sumptuary  laws :  .  .  .  this  is  precisely  the  best  point 
about  our  taxation ;  ...  if  you  strike  at  objects  of  luxury, 
you  act  contrary  to  civilisation  ;  .  .  .  What  products,  in  the 
language  of  economics,  are  articles  of  luxury?  Those 
which  represent  the  smallest  portion  of  the  total  wealth, 
those  which  enter  last  into  the  sequence  of  industrial 
products,  and  which  for  their  creation  require  the  pre- 
existence  of  all  the  others.  From  this  point  of  view,  every 
article  of  human  manufacture  has  been,  and  in  its  turn 
has  ceased  to  be,  an  object  of  luxury,  since  by  '  luxury ' 
we  only  mean  the  chronological  or  commercial  sequence 
of  the  relation  between  the  elements  of  wealth.  Luxury 
is,  in  fact,  synonymous  with  progress ;  at  each  moment  of 
social  life,  it  represents  the  maximum  degree  of  comfort 
realisable  by  labour,  the  attainment  of  which  is  the  right, 
as  it  is  the  destiny,  of  all.  .  .  .  Human  luxury  elevates 
and  enobles  habits,  it  is  the  first  and  most  efficient  agent 
in  the  education  of  the  populace,  and  for  most  men  it  is 
the  incentive  that  urges  them  to  strive  after  the  ideal.  .  .  . 
It  is  the  taste  for  luxury  which,  in  our  day,  in  default  of 
religious  principles,  maintains  social  progress  and  reveals 
the  idea  of  their  human  dignity  to  the  lower  classes.  .  .  . 
Luxury  is  more  than  a  right  in  our  society:  it  is  an 
imperious  demand  ;  and  the  man  who  never  allows  himself 
a  little  luxury  is  truly  to  be  pitied.  And  it  is  at  a  time 
when    universal    effort    is    tending    more    and   more  to 


LUXURY  PROMOTES  INVENTION  223 

popularise  objects  of  luxury,  that  you  propose  to  restrict 
the  enjoyment  of  the  people  to  commodities  which  you 
are  pleased  to  describe  as  objects  of  necessity.  .  .  .  The 
workman  sweats,  denies  himself,  and  toils  in  order  to  buy 
an  ornament  for  his  fiancee,  a  necklace  for  his  little 
daughter,  or  a  watch  for  his  son,  and  you  would  deprive 
him  of  this  pleasure.  ,  .  .  But  have  you  considered  that 
to  tax  articles  of  luxury,  is  to  proscribe  the  arts  which 
produce  them  ?  "  ^ 

Some  collectivists  would  deal  with  luxury  in  a  far  more 
radical  manner  than  by  taxation :  they  would  abolish  it, 
by  refusing  to  produce  the  articles  it  demands.  It  is 
impossible  to  place  any  other  interpretation  than  this 
upon  the  hope  expressed  by  Wallace,  that  production, 
being  no  longer  occupied  in  the  manufacture  of  super- 
fluous objects,  leisure  might  be  largely  extended. 

Sufficient  importance  is  not  given  by  collectivists  to 
the  influence  of  luxury  in  promoting  commerce  and 
stimulating  inventors ;  the  increase  of  leisure  would 
indeed  be  dearly  purchased  if  it  involved  the  renunciation 
of  luxury.  Some  of  these  men  appear  to  picture  the 
social  life  of  the  future  as  life  in  a  cloister,  without  a  God 
and  without  hope  of  future  life — that  is,  an  existence  bereft 
of  all  that  makes  conventual  life  supportable.  It  maybe 
said  that  the  proscription  of  luxury  would  apply  only  to 
the  wealthy,  and  that  collectivism,  pitying  the  weakness  of 
humanity,  would  leave  untouched  the  luxuries  desired  by 
the  wage-earning  and  the  middle  classes  ;  but  in  this 
case,  the  saving  of  labour  effected  would  be  inappreciable. 

The  census  of  1881  gives  the  French  population  as 
37,405,000,  of  whom  18,249,209  were  returned  as  being 
employed  in  agricultural  labour  of  some  kind.  It  is 
clear,  therefore,  that  the  elimination  of  articles  of  luxury 
could  not  diminish  labour  by  one-half,  since  agricultural 
products  are  not  luxuries.  In  other  classes  of  labour,  we 
find  that  1,130,094  men  were  miners  and  metalworkers; 
these,  again,  are  not  producers  of  superfluous  objects ; 
2,100,560  workmen  gain  their  living  in  mills  and  manu- 
^  Proudhon,  op.  cit.,  pp.  284-6,  vol.  i.,  4th  ed. 


224  ANALYSIS  OF  EMPLOYMENTS 

factories,  in  the  produce  of  which  luxuries  have,  if  any,  a 
quite  insignificant  place :  articles  produced  in  great 
factories  by  the  aid  of  machinery  are  intended  for  general 
consumption,  not  for  the  use  of  a  small  number  of  privi- 
leged persons.  In  transport  549,568,  and  in  the  marine 
service  251,173  are  employed:  here,  again,  no  reduction 
would  be  possible,  except  perhaps  in  the  case  of  the  small 
number  of  sailors  on  private  yachts  or  pleasure  boats, 
since  the  men  employed  on  railways  and  in  the  shipping 
industry  are  engaged  in  the  transport  and  exchange  of 
indispensable  commodities,  such  as  coal,  iron,  wheat, 
cotton,  and,  to  a  much  smaller  extent,  coffee  or  tobacco ; 
it  is  not  with  luxuries  such  as  silk  from  China  or  diamonds 
from  the  Cape  that  the  ships  and  the  railways  are  loaded ; 
and  the  statistics  of  passenger  traffic  show  that  second 
and  third  class  are  far  more  numerous  than  first  class 
passengers,  and  produce  larger  receipts.  The  army  and 
navy,  the  gendarmerie  and  police,  account  for  552,851 
persons ;  most  collectivists  propose  to  abolish  these  forces, 
including  the  police ;  but  unless  collectivism  effects  an 
immediate  transformation  of  men  into  angels,  a  police  force 
will  be  indispensable.  And  it  is  no  good  answer  to  say 
that  social  conditions  being  equalised,  the  temptations  to 
crime  would  be  greatly  diminished.  We  have  shown — and 
Schaffle  himself,  since  he  allows  that  inequality  of  salaries 
would  be  unavoidable,  must  also  admit — that  social 
conditions  under  collectivism  cannot  remain  equal. 
Besides,  great  wealth  is  by  no  means  necessary  as  an 
incentive  to  crime ;  the  amount  for  which  nine-tenths  of 
murders  are  committed  is  quite  trivial,  sometimes  no  more 
than  10  fr. ;  indeed,  as  things  now  are,  the  wealthy  have  far 
less  need  for  protection  than  those  in  a  more  humble 
station. 

It  has  also  been  conclusively  shown  that,  far  from 
removing  the  cause  of  international  disputes,  collectivism 
would  multiply  them,  and  thus  an  army  and  navy  would 
be  quite  as  necessary  as  a  police  force. 

So  far  we  have  enumerated  the  calling  of  22,833,455 
persons  out  of  the  total  population  of  France  (37405,290), 


THE  GAIN  INSIGNIFICANT  226 

and  we  have  seen  that  with  regard  to  these  classes  of 
labourers,  if  the  manufacture  of  luxuries  were  to  cease, 
the  gain  in  economy  of  labour  would  be  quite  in- 
significant. 

We  now  come  to  commerce,  with  3,843447  work- 
people. This  number  includes  women  and  children,  and 
is  thus  divided:  1,895,195  persons  are  engaged  in  retail 
trades;  1,164,590  are  keepers  of  hotels  or  inns,  coffee- 
houses or  lodging-houses ;  and  finally,  783,662  are  bankers, 
agents,  or  wholesale  merchants  and  commercial  travellers, 
either  salaried  or  independent.  These  figures,  especially 
in  the  two  first  classes,  are  large,  and  the  number  of  hotel- 
and  inn-keepers  appears  to  be  excessive ;  but  it  is  not  to 
the  wealthy,  but  to  the  working  and  middle  classes  that 
this  is  due.  The  tendency  of  civilisation,  where  freedom 
exists,  appears  to  be  towards  a  reduction  in  the  number 
of  persons  who  live  entirely  by  commerce,  owing  to  the 
gradual  substitution  of  large  for  small  industries  that  is 
now  in  progress.  Would  it  be  possible  for  collectivism 
to  act  more  rapidly  or  efficiently  ?  Seeing  the  prodigious 
amount  of  administrative  machinery  that  would  be 
necessary  for  its  regime^  it  is  very  unlikely  that  collec- 
tivism would  effect  any  diminution  in  the  number  of 
persons  who  are  now  engaged  in  shops  and  account 
keeping.  Every  one  knows  that  all  public  administra- 
tions, especially  in  a  democracy,  have  a  tendency  to 
increase  the  number  of  employees  and  of  functions ;  but 
even  admitting  that  the  number  of  persons  engaged  in 
the  work  of  distribution  might  be  reduced  by  a  quarter 
or  even  a  third,  it  would  represent  but  a  trifling  economy 
of  labour,  and  the  gain  would  be  more  than  counter- 
balanced by  the  dangers  inseparable  from  the  abolition 
of  free  commerce. 

The  liberal  professions,  according  to  the  census  of 
1881,  include  1,585,358  persons  :  this,  again,  is  an  excessive 
number,  to  the  reduction  of  which  the  progress  of  civilisa- 
tion ought  to  tend ;  but  collectivism  could  do  but  little 
in  this  direction,  since  more  than  half — that  is,  806,050 — of 
these   people   are   public   functionaries.      Free  education, 

P 


226  EXPORT  OF  LUXURIES 

which,  if  suppressed,  would  have  to  be  replaced  by  official 
education,  accounts  for  111,330,  and  religious  communities 
for  115,595  men  and  women;  but  a  large  part  (two-thirds) 
of  the  latter  class  give  their  work  either  for  education  or 
as  nurses.  The  service  of  religion  occupies  112,771,  and 
139,000  are  engaged  in  the  medical  profession;  it  is 
very  unlikely  that  these  numbers  would  be  smaller  under 
a  coUectivist  regime;  the  legal,  artistic,  and  scientific 
professions  of  all  kinds  account  for  the  remainder.  No 
doubt  some  reduction  in  the  personnel  of  the  liberal 
professions  might  be  made  by  a  ruthless  application  of 
the  principles  of  collectivism ;  but  assuming  that  liberty 
of  conscience  would  still  be  respected,  it  is  obvious  that 
the  reduction  could  not  be  large. 

It  is  chiefly  to  the  smaller  industries  that  collectivists 
would  look  for  securing  economy  in  production.  These 
industries  employ  6,093,453  individuals,  including  women 
and  children,  and  it  is  said  to  be  by  this  class  that  objects 
of  luxury  are  chiefly  manufactured ;  but  the  extent  of 
this  production  is  far  less  than  is  generally  supposed. 
The  class  consists  of  bootmakers,  tailors,  upholsterers, 
smiths,  carpenters,  chimney-sweeps,  etc.  In  all  proba- 
bility, three-quarters  at  least  of  the  persons  engaged  in 
small  industries  are  following  trades  which  are  indispens- 
able, and  probably  not  more  than  a  quarter  of  the  whole 
number,  at  the  outside,  are  employed  in  the  production  of 
objects  of  luxury.  It  would,  however,  be  rash  to  assume 
that  even  this  amount  of  labour  could  be  profitably 
diverted  to  the  production  of  necessaries.  In  the  nine 
years  between  1892  and  1900,  the  value  of  provisions 
imported  into  France  varied  between  a  minimum  of  829 
millions  of  francs  in  1900  and  a  maximum  of  1505  millions 
in  1898,  all  of  which  were  necessaries;  during  the  same 
period,  the  imports  of  raw  material,  such  as  cotton, 
timber,  coal,  and  metals,  amounted  to  a  maximum  of 
2839  millions  of  francs  in  1899  ^"d  a  minimum  of  2101 
millions  in  1895  ;  making  a  total  average  value  of  imports 
from  foreign  countries  of  about  4  milliards  of  francs 
annually.     How  were  all  these  imports,  for  the  most  part 


LUXURIES  PAY  FOR  NECESSARIES         227 

articles  of  essential  utility,  many  of  which  France  herself 
could  not  produce  in  sufficient  quantity,  paid  for  ?  They 
were  paid  for  by  the  export  of  the  class  of  commodities 
called  articles  of  luxury,  and  therefore  it  is  a  mistake  to 
imagine  that  the  suppression  of  the  manufacture  of  articles 
of  luxury  would  make  it  possible  to  produce  a  larger  quantity 
of  articles  of  essential  utility.  In  some  countries  but  few 
articles  of  luxury  are  produced ;  in  others,  especially  in 
France,  this  industry  is  far  more  developed,  and  supplies 
the  foreign  as  well  as  the  domestic  demand;  it  is 
therefore  the  production  of  luxuries  which  indirectly 
but  actually  provides  commodities  which  are  of  essential 
necessity. 

It  is  clear,  therefore,  that  a  reduction  in  the  number 
of  workmen  employed  in  producing  objects  of  luxury,  far 
from  being  profitable  to  France,  would  be  the  cause  of 
serious  loss.  Suppose  it  were  possible  to  divert  the 
labour  of  a  million  men  and  women  thus  employed  to 
the  production  of  wheat,  what  would  be  the  result? 
Their  labour,  under  present  conditions,  makes  it  possible, 
as  we  have  seen,  to  purchase  wheat  or  any  other  neces- 
saries which  may  be  required,  from  abroad ;  but  when 
a  skilled  artisan  is  employed  as  an  agricultural  labourer, 
he  might  produce  from  60  to  70  hectolitres  of  wheat, 
whereas  the  produce  of  his  work  in  his  own  trade  would 
exchange  for  120  to  140  hectolitres  of  foreign  corn.  Again, 
a  fashionable  milliner,  however  strong  and  active,  could 
not  produce  more  than  30  hectolitres  of  grain,  whilst 
in  her  own  business  her  agile  fingers  would  create 
commodities  worth  double  that  quantity.  France  is, 
indeed,  the  last  country  in  the  world  in  which  the 
suppression  of  the  manufacture  of  articles  of  luxury 
would  increase  the  production  of  articles  of  necessity ; 
it  would,  on  the  contrary,  diminish  it,  since,  as  has 
been  shown,  indirect  production  through  the  medium 
of  international  trade,  is  a  far  more  efficient  and  remuner- 
ative method  than  the  direct  production  of  these  com- 
modities. 

We  have  not  yet  exhausted   the   information  to  be 


228  PARASITES  AND  IDLERS  (?) 

obtained  from  these  census  tables.  Persons  living  exclus- 
ively on  their  income  number  2,121,173.  Here,  again, 
coUectivists  think  economies  might  be  effected,  but  three- 
quarters  of  the  individuals  comprising  this  group  are 
women  and  children,  and  probably  one-half  of  the 
remaining  quarter  are  aged  people.  The  number  of 
persons  belonging  to  this  class  whom  it  would  be 
possible  to  employ  in  production  would  be  very  small, 
since  even  coUectivists  admit  that  the  aged  may  cease 
from  labour. 

Besides,  all  members  of  this  class  are  by  no  means 
parasites  and  idlers :  they  are  no  doubt  to  be  met  with, 
but  their  right  to  be  idle  must  be  respected,  since  inter- 
ference would  violate  the  sound  principle  of  individual 
liberty,  the  chief  of  all  human  rights,  and  would  also 
prejudicially  affect  the  custom  of  inheritance,  the  most 
powerful  of  all  incentives  to  thrift  and  enduring  labour. 
Besides,  many  are  to  be  found  in  this  class  whose  lives 
are  useful  to  society :  capitalists,  for  example,  who  seek 
for  and  initiate  new  enterprises,  and  highly  educated 
and  refined  persons  interested  in  science,  in  art,  and 
in  letters,  who  cherish  and  maintain  the  highest  results 
of  civilisation. 

In  addition  to  all  the  classes  to  which  we  have 
referred,  there  are  928,000  unclassed  individuals  (524,000 
women  and  403,000  men),  amongst  whom  are  included 
the  personnel  of  establishments  for  public  instruction, 
of  alms-houses,  hospitals,  and  of  prisons,  also  domestic 
servants  who  are  temporarily  out  of  place,  infants  put 
out  to  nurse,  and  persons  of  unknown  professions ;  of 
this  class  it  is  unnecessary  to  speak. 

The  class  of  domestic  servants  is  one  which  has 
specially  attracted  the  attention,  both  of  coUectivists  and  of 
their  critics.  This  class  is  not  placed  under  a  separate 
heading  in  the  census  :  servants  are  classified  according  to 
the  profession  or  occupation  of  their  employers ;  their 
number  (1,506,639  women  and  1,050,627  men :  total 
2,557,266)  appears  at  first  sight  to  be  enormous,  and  to 
afford  some  reason  for  the  outcry  of  coUectivists  on  the 


OCCUPATIONS  229 

subject  of  wasted  labour ;  *  but  when  this  return  is 
analysed,  it  is  found  that  the  great  majority  of  these 
persons  are  not  employed  in  personal  service,  but  on  work 
connected  with  some  trade.  Thus,  over  1,400,000,  or 
nearly  three-fifths,  are  occupied  in  agriculture ;  of  this 
number  706,298  are  men  [almost  seven-tenths  of  the  total 
number  of  male  servants].  These  so-called  "domestic" 
servants  only  differ  from  other  agricultural  labourers  in 
that  they  are  paid  by  the  year,  and  possess  that  security  of 
occupation  which  socialists  and  economists  consider  so 
desirable.  Almost  the  same  may  be  said  of  the  234,000 
employed  in  industry ;  they  are,  in  reality,  assistants  in 
industrial  labour,  and  this  is  even  more  true  of  the  347,000 
servants  returned  as  being  employed  in  trade,  such  as 
grocers',  butchers',  and  haberdashers'  assistants,  and  of 
those  permanent  employees  who,  owing  to  want  of  educa- 
tion, are  not  classed  amongst  clerks.  Careful  analysis 
shows  that  the  number  of  male  servants  who  do  no 
productive  work,  either  commercial  or  agricultural,  does 
not  exceed  160,000  to  180,000.  In  England,  owing  to  the 
fact  that  male  domestic  servants  are  taxed,  accurate 
statistics  of  their  number  are  obtainable.  According  to  the 
latest  English  returns  (1901-02),  the  number  for  which  the 
tax  was  paid,  was  211,020.^  There  can  be  no  doubt  that 
in  France  there  would  not  be  so  many.  In  Paris  a  valet 
is  not  as  a  rule  employed  by  any  one  paying  a  rent  of  less 
than  3000  fr.  On  ist  January  the  number  of  apartments 
of  a  net  annual  rental  of  3000  fr.  or  over  was  26,402,^  and 
allowing  an  average  of  two  male  servants  to  each,  it  would 
only  make  a  total  of  53,000  for  the  whole  of  Paris,  amongst 
whose  citizens  are  included  the  owners  of  a  half,  or  at  least 
a  third,  of  the  great  fortunes  of  the  nation.  It  would  have 
been  satisfactory  if  more  recent  information  with  regard  to 
occupations  could  have  been  given  than  that  taken  from 

1  M.  Jules  Guesde  dwelt  with  satisfaction  upon  this  point  at   a 
recent  meeting  at  Mans. 

2  The  Financial  Reform  Almanack  for  1903,  p.  166. 

2  See  translation   of   article  by  Leone  Levi  in  the  Btilletin  de 
Siatistique  du  Minisiire  des  Finances^  juillet  1902,  p.  567. 


230  THE  CENSUS  OF  1896 

the  census  of  1881.  Unfortunately,  however,  ill-advised 
alterations  in  the  tabulation  of  later  censuses  make  it 
impossible  to  obtain  accurate  information  upon  this  point. 
The  latest  census  of  which  up  to  the  present  time 
(February  1903)  detailed  results  have  been  published,  is 
that  of  1896.  This  gives  the  distribution  of  what  is  there- 
in described  as  the  "professional  or  active"  population, 
but  leaves  out  of  count  all  persons,  women  and  children, 
dependent  upon  the  work  of  one  or  more  members  of  the 
family  ;  at  the  very  least,  the  number  of  these  individuals 
ought  to  have  been  given  separately,  as  is  done  in  the 
German  statistics  referred  to  further  on ;  without  this 
information  it  is  impossible  to  form  an  accurate  idea  of 
the  true  distribution  of  the  total  population  amongst  the 
various  occupations.  In  the  same  way,  this  census  does 
not  give  a  separate  classification  of  proprietors,  of  persons 
without  professions  living  on  their  incomes,  or  of  paupers. 
Still,  although  imperfect,  the  census  of  1896  appears  to 
lead  to  the  following  conclusions.  The  first  great  classifi- 
cation is  into  four  classes  : — 

1.  The    professional    or  active   population   working  in 

France    (not    including   the    members    of  their 

families  supported  by  them)  .  .  .       18,467,338 

2.  Population  working  abroad       .  .  .  .  4>5IS 

3.  Non-professional   population   separately  enumerated 

(army    hospitals,      educational     establishments, 

religious  communities,  prisons,  etc.)  .  ,         1,027,918 

4.  Population   with   no   paid  occupation   (including  all 

members  of  families  supported  by  the  work  of  the 

individuals  in  the  first  class)  .  .  ,       18,769,240 

Total,  .  .  .      38,269,011 

The  last  class  is  principally  composed  of  women  and 
children,  and  of  the  aged. 

Of  the  18,467,388  in  the  first  class,  nearly  one-half 
(8,392,128)  are  occupied  in  agriculture  and  forestry; 
7,902,889  are  employed  in  fishing,  industry,  or  commerce  ; 
967,900  in  the  public  service  as  officials  of  all  kinds,  and  in 
the  liberal  professions;   899,772  are  classified  under  the 


DOMESTIC  SERVANTS  231 

heading  "domestic"  servants  employed  by  proprietors 
and  rentiers ;  and  lastly,  304,649  are  described  as  employees 
and  workmen  out  of  employment — persons  whose  profession 
is  unknown. 

Of  these  figures,  the  most  striking  are  those  relating  to 
domestic  servants,  and  they,  perhaps,  are  the  only  ones  which 
give  precise  information.  The  number,  899,772,  although 
it  still  includes  some  employees,  is  but  little  more  than  a 
third  of  the  number  given  in  the  census  of  i88i,the  reason 
being  that  in  1896  agricultural  domestics,  who  in  truth 
are  not  domestic  servants  at  all  in  the  ordinary  sense  of 
the  word,  have  been  rightly  excluded.  Of  the  899,772 
domestic  servants  employed  by  proprietors  and  rentiers, 
703,148  are  stated  to  be  female,  and  160,173  male;  the 
difference  (over  36,000)  from  the  total  of  899,772  probably 
represents  employees  of  proprietors  and  rentiers,  such  as 
hall-porters  or  some  intermediate  class.  From  this  it 
appears  that  there  are  only  160,173  male  domestic  servants 
in  France,  and  we  see  that  large  deductions  must  be  made 
from  statements,  such  as  those  made  by  Guesde,  in  which 
the  distinction  between  agricultural  and  domestic  servants 
is  entirely  disregarded. 

In  order  to  form  an  estimate  of  the  number  of  workmen 
engaged  in  the  production  of  luxuries,  almost  the  whole  of 
the  great  class  of  agriculturists  and  foresters,  who  number 
8,392,128,  not  far  from  one-half  of  the  total  "active" 
population,  must  be  eliminated ;  some  few  of  the  market 
garden  workers  may  be  employed  in  the  production  of 
forced  vegetables  and  fruits,  but  their  number  is  insignifi- 
cant, and  it  should  be  remembered  that  this  kind  of 
production  is  useful  to  the  community,  since  it  sets  an 
example  for  the  improvement  of  cultivation.^  In  the  next 
place,  the  7,902,889  persons  occupied  in  fishing,  industry, 
and  commerce  cannot  be  said  to  be  occupied  in  producing 
luxuries.  Iron  and  steel  and  common  metal  industries 
employ  (groups  4  K  and  4  L)  nearly  700,000  persons,  or 
nearly  4  per  cent,  of  the  working  population ;  finer  metal 

^  See  Traitc  thhrique  et  pratique  d^^conomie  politique,  vo\.  iv., 
pp.  237-81,  by  P.  Leroy  Beaulieu. 


232  THE  GAIN  INSIGNIFICANT 

work  and  precious  stone  cutting  (groups  4  M  and  4  N), 
only  employ  30,600 ;  hand  lace  making,  only  28,800 ; 
flower  and  feather  making,  23,000 ;  corset  making,  12,100 ; 
the  preparation  and  dyeing  of  feathers,  for  dress  and 
ornaments,  5600 ;  kid  glove  makers,  20,600 ;  Morocco 
leather  workers,  2200;  frame  makers,  1300;  pianos  and 
their  accessories,  3800 ;  the  making  and  decoration  of 
fans,  1200;  plate  glass  and  mirrors,  1200;  crystal  and 
table  glass  engraving,  500;  art  mirrors  and  glass  trade, 
800 ;  stained  glass,  800 ;  enamels,  800 ;  carriage  building, 
only  14,000,  whilst  the  wheelwright  industry  employs 
81,600,  or  nearly  six  times  as  many ;  watch-  and  clock- 
makers  and  jewellers,  19,300,  in  addition  to  10,300  makers 
of  clock  furniture. 

No  doubt  this  nomenclature  does  not  include  all 
makers  of  articles  of  luxury,  but  it  includes  the  principal 
trades,  and  we  find  that  the  total  number  of  workers 
employed  does  not  reach  180,000,  or  less  than  i  per 
cent,  of  the  working  population ;  if  this  number  is 
doubled,  so  as  to  make  ample  allowance  for  those  workers 
not  included  in  the  180,000,  but  who  in  some  way  or  other 
are  producers  of  articles  solely  intended  for  the  wealthy, 
we  get  360,000,  a  number  which  even  then  is  less  than  2 
per  cent,  an  infinitesimal  fraction  of  the  whole  army  of 
workers,  and  this  in  the  country  which  is,  par  excellence, 
the  producer  of  objects  of  luxury  and  art ! 

If,  then,  socialists  were  to  abolish  the  production 
of  luxuries,  it  is  clear  that  the  increased  production  of 
articles  of  utility  thus  made  possible  would  be  altogether 
insignificant. 

The  problem  of  luxury  has  been  very  inadequately 
treated  by  moralists  and  economists :  no  one  ought  to 
become  a  slave  to  his  senses ;  but  in  itself  luxury  is  of 
economic  advantage,  and  it  must  be  remembered  that 
the  greater  part  of  the  articles  now  used  for  purposes  of 
cleanliness,  hygiene,  and  decency,  by  all  classes,  were  not 
long  since  considered  to  be  objects  of  luxury. 

If  we  refer  to  Germany,  we  find  from  the  statistical 
annual  for  the  empire  for   1902,  that,  according  to  the 


GERMAN  STATISTICS  238 

census  of  1895,  out  of  a  total  population  of  51,770,284, 
18,501,307  were  employed  in  agriculture,  forestry,  and 
fishing;  20,253,241  in  the  larger  industries,  mines,  and 
building ;  5,966,846  in  commerce,  transport,  and  public 
establishments  (hotels  and  inns),  making  in  all  44,721,000 
persons  engaged  in  the  work  of  production  properly  so 
called,  or  in  the  distribution  of  products ;  886,807 
individuals  were  employed  wholly  or  partly  in  domestic 
work ;  soldiers,  sailors,  public  and  communal  officials, 
and  members  of  the  liberal  professions,  with  their  families, 
are  put  down  at  2,836,014,  and  persons  of  no  profession, 
with  their  families,  at  3,327,000.  Domestic  servants  are 
entered  as  1,339,000 ;  this  number,  however,  is  not  in 
addition  to  the  other  classes,  since  in  the  German  statistics 
servants  are  enumerated  in  the  same  professions  as  their 
employers,  but  their  number  is  in  each  case  given 
separately.  The  3,327,000  persons  with  no  profession, 
with  their  families,  are  far  from  being  all  wealthy  and 
able-bodied  idlers;  the  168,116  servants  employed  by 
them  must  first  be  deducted  from  the  total :  the  method 
of  composition  of  this  class  is  also  very  complicated :  the 
first  and  most  important  section  is  that  of  persons  "  living 
on  their  own  income,"  derived  from  "  rentes  "  or  "  pensions," 
and  (deducting  their  servants)  numbering  2,221,264,  or 
less  than  5  per  cent,  of  the  total  population.  This  class 
includes  all  pensioners  of  the  state  and  of  private  institu- 
tions, all  those  retired  from  business,  and  all  those  who 
have  reached  an  advanced  age,  and  live  on  their  savings. 
For  the  most  part,  they  are  people  of  moderate  means,  as 
is  shown  by  the  small  number  of  servants  they  employ — 
only  one  for  over  thirteen  persons.  The  remainder  of 
those  entered  in  this  class  are  people  of  very  humble 
condition,  or  in  actual  poverty;  they  consist  of  248,291 
persons,  including  their  families,  living  by  assistance  (von 
Unterstiitzung  Lebende) ;  414,587  in  establishments  for 
the  sick  or  charitable  institutions;  37,318  in  the  poor- 
houses  (Armenhaiisern) ;  81,750  in  hospitals  and  refuges 
for  foreigners ;  61,256  in  prisons  or  houses  of  correction; 
finally,  38,383  persons  (including  25,484  women)  without 


234  THE  NUMBER  OF  IDLE  RICH 

any  profession,  and  not  included  in  the  foregoing  cate- 
gories. 

Here,  again,  we  see  how  small  a  number  of  idle  rich  are 
to  be  found  in  these  lists ;  the  German  population  is  even 
less  open  than  the  French  to  this  superficial  criticism,  and 
these  statistics  give  no  support  to  the  assertion  that  a 
great  economy  might  be  effected  by  reducing  the  produc- 
tion of  luxuries  or  the  number  of  the  leisured  classes. 
Persons  without  professions,  living  on  their  means,  being 
adults  and  able-bodied,  would  certainly  not  number 
ioo,cxx).  Officials,  other  than  soldiers,  and  the  members 
of  liberal  professions  of  all  kinds,  even  the  lowest  (Sogen- 
nannte  freie  Berufe),  deducting  their  wives  and  families, 
numbered  794,983,  of  whom,  according  to  the  census  of 
1895,  176,848  were  women;  all  the  employees  of  the 
public  services  are  included  in  these  figures,  and  since  the 
reduction  of  the  number  of  officials  is  a  reform  about  which 
socialism  shows  no  anxiety,  it  is  not  probable  that  many 
men  would  be  withdrawn  from  this  class  in  order  to  be 
employed  in  the  production  of  objects  of  utility.  No 
doubt  it  may  be  said  that  a  large  number  of  merchants 
and  proprietors  generally  would  be  suppressed ;  but  the 
greater  number,  both  of  proprietors  and  merchants,  now 
render  real  service  to  the  state,  and,  if  removed,  would 
have  to  be  replaced  by  public  officials,  who  would  often 
be  less  competent,  and  who  would  not  perform  their  work 
with  the  same  energy. 

Examination  of  the  161  groups  of  industrial  and  the 
22  groups  of  commercial  occupations  will  show  to  what 
extent  German  labour  is  engaged  in  the  product  of 
luxuries.^ 

Artists  and  industrial  artists,  exclusive  of  musicians 
and  employees  of  theatres,  who  are  included  under  the 
head  of  liberal  professions,  exclusive  also  of  their  families, 
are   28,348    in    number,   34-359    of   whom    are    women ; 

*  Statistisches  Jahrbuch  fur  das  Deutsche  Reich  for  1897,  which 
gives  the  analysis  of  the  population  according  to  occupation,  taken 
from  the  latest  census  in  which  the  details  are  given — that  of  1895, 
pp.  7-23. 


LUXURY  AND  CIVILISATION  236 

32,911  women  are  employed  in  making  articles  of  fashion, 
27,797  (18,000  women)  in  making  braces,  neckties,  gloves, 
and  corsets  (the  half,  at  least,  of  these  articles  cannot  be 
said  to  be  objects  of  luxury) ;  40,413,  of  whom  10,574  are 
women,  are  workers  in  precious  metals  and  jewellery; 
6585  in  making  mirrors,  etc.  (1313  women);  33,910 
men  and  women  in  clock-  and  watch-making;  and 
20,338  in  making  musical  instruments. 

These  are  the  principal  industries  engaged  in  the 
manufacture  of  articles  of  luxury,  but  many  of  these 
things  are  considered  by  the  lower  and  lower  middle  classes, 
not  as  luxuries,  but  as  necessities.  A  certain  number  of 
workmen  employed  in  industries  on  a  larger  scale  may 
also  be  included  amongst  the  producers  of  luxuries,  as,  for 
instance,  the  men  employed  in  building  great  mansions, 
but  their  number  is  quite  insignificant.  It  is  evident, 
therefore,  that  when  collectivists  imagine  that  by  abolish- 
ing or  largely  reducing  the  manufacture  of  luxuries  they 
could  diminish  human  labour  by  one-half,  they  are  labour- 
ing under  a  complete  delusion  ;  faulty  as  is  their  calcula- 
tion from  the  material  point  of  view,  their  error  is  far 
greater  on  the  moral  side.  The  prospect  of  obtaining 
refined  pleasures,  and  of  possessing  beautiful  objects, 
constitutes  a  great  incentive  to  energy  and  thrift ;  luxury 
is  not  only  the  result,  but  is  also  one  of  the  chief  causes  of 
progressive  civilisation. 

Facts  quite  as  destructive  to  coUectivist  theories  as 
those  derived  from  the  census,  are  to  be  found  in  the 
statistics  of  revenue,  which  show  the  respective  shares 
of  the  large,  the  moderate,  and  the  small  incomes  in  the 
total  revenue  of  a  nation.  It  has  been  shown  in  the 
Essai  sur  la  repartition  des  richesses}  that  in  Prussia 
more  than  two-thirds  of  the  total  revenue  belongs  to 
persons  the  richest  of  whom  have  incomes  of  only  2500  fr. 
(;^ioo),  and  that  more  than  four-fifths  of  the  total  national 
income  of  Prussia  is  in  the  hands  of  the  lower  or  middle 
classes — that  is  to  say,  of  persons  whose  maximum  is  not 
more  than  6000  fr.  to  7000  fr.  (^240  to  ;^28o).  In  Saxony 
*  P.  Leroy  Beaulieu,  chap.  xix. 


236  RENTS  AND  INCOMES 

it  is  the  same  as  in  Prussia,  and  an  analysis  of  schedules 
D.  and  E.  of  the  English  income-tax  returns  leads  us  to 
believe  that  even  there  the  larger  part  of  the  national 
income  belongs  to  the  wage-earning  and  the  lower  middle 
classes.^  In  France  the  facts  are  even  more  striking ;  in 
Paris,  first  amongst  cities  of  luxury,  the  number  of 
individuals  whose  income  exceeds  32,000  fr.  (;:Ci28o)  is  but 
little  over  15,000,  and  those  whose  income,  from  whatever 
source,  is  over  12,000  fr.  (;£'48o)  do  not  number  over 
50,000. 

Again,  with  regard  to  lodging,  the  Bulletin  de 
Statistique  for  July  1902  gives  a  summary  of  apartments 
and  rents  in  Paris.  It  appears  from  this,  that  apartments 
at  a  rental  of  20,000  fr.  (;^8oo)  and  above,  number  only 
527,  with  a  total  rental  of  17,047,150  fr.  (;^68i,885);  those 
at  10,000  fr.  (;^40o)  to  19,999  fr.  rental  are  2296  in  number, 
with  a  total  of  29,615,670  fr.  (;^i,400,627) ;  those  at  5000  fr. 
(;^20o)  to  9999  fr.  rental,  8758  in  number,  with  a  total 
of  57.539>202  fr.  (;^2,495,668);  and  those  at  3000  fr.  (;^I20) 
to  4999  fr.  rental,  14,821  in  number,  with  a  total  of 
54,504,480  fr.  (;^2,30i,569).  The  sum  total  of  these  figures, 
which  represent   net   rentals,   amounts  to    158,500,000  fr. 

(;^6,340,000). 

Including  the  industrial  quarters,  the  total  net  rental 
value  of  dwelling-houses  in  Paris  is  519,766,518  fr. 
(;^23,824,02o).  Thus,  the  whole  of  the  wealthier  popula- 
tion of  this  city  of  luxury,  including  all  persons  who  pay  a 
net  rent  of  3000  fr.  (;^i2o)  or  more,  occupy  apartments  the 
total  net  rental  of  which  is  considerably  less  than  one-third 
of  that  for  the  whole  of  Paris. 

Assuming  that  on  an  average  income  is  eight  times 
the  amount  paid  as  rent,  and  making  the  necessary 
allowance  for  vacant  apartments,  we  find  that  510 
persons  in  Paris  have  incomes  over  160,000  fr.  (;^640o) ; 
2154  from  80,000  fr.  (;^320o)  to  160,000  fr. ;  8270  from 
40,000  fr.  (;i^i6oo)  to  80,000  fr.  {£12.00)  \  lastly,  13,874 
from  24,000  fr.  (;^96o)  to  40,000  fr.  ;  and  that  less  than 
25,000  persons  possess  incomes  over  24,000  fr.  (.^960). 
[*  V.  supra^  p.  24,  note.] 


"FASHION''  237 

Another  point  of  importance  is  that  the  whole  income 
of  these  classes  is  far  from  being  used  in  an  unproductive 
way :  a  large  part  of  it  is  invested — that  is,  it  is  trans- 
formed into  railways  or  other  works  of  permanent 
value.  The  portion  of  their  income  saved  by  the  upper 
and  middle  classes  in  France  cannot  be  estimated  at  less 
than  one-third,  and  of  the  two  to  three  milliards  of  francs 
annually  saved  by  the  nation,  two-thirds,  at  least,  is  due  to 
the  thrift  of  the  well-to-do  and  wealthy  classes,  although 
together  they  do  not  possess  more  than  a  sixth  or  seventh 
of  the  whole  national  income  ;  not  more  than  4  per  cent. 
to  5  per  cent,  of  this  is  used  in  the  purchase  of  objects  of 
luxury,  and  even  this  includes  those  popular  luxuries 
which  no  people  not  absolute  ascetics  could  forego.  It 
must  also  be  remembered  that  what  may  be  called  col- 
lective luxury — that  is,  public  expenditure  on  monuments, 
churches,  promenades,  public  f§tes,  etc. — accounts  for  a 
large  and  continually  increasing  portion  of  the  expendi- 
ture on  luxuries ;  that  for  which  the  wealthier  classes 
are  directly  responsible  does  not  represent  2  per  cent, 
upon  the  national  income. 

In  view  of  these  facts,  but  little  importance  attaches 
to  Kautsky's  assertion  that  socialism  would  confer  a 
great  benefit  on  humanity  by  abolishing  "fashion." 
"  One  of  the  chief  causes  of  extravagance,"  he  writes, 
'*  is  '  fashion.'  Changes  of  fashion  are  not  the  effect  of 
a  law  of  nature,  but  of  certain  social  conditions.  .  .  .  To 
be  always  dressed  in  the  latest  fashion  is  a  token  of 
wealth,  which  is  the  more  impressive  the  more  frequently 
the  fashion  changes ;  the  desire  is  not  only  to  be  dressed 
in  the  latest  style,  but  also  that  this  should  be  obvious. 
Novelty  must  not  only  be  something  new,  but  different 
from  that  which  preceded  it.  .  .  .  Formerly,  alterations 
of  fashion  were  the  privilege  of  the  elite :  to-day,  ladies 
indignantly  complain  that  the  rage  for  dressing  in  the 
fashion  is  spreading  more  and  more  amongst  domestic 
servants  and  work-girls.  To-day  the  effect  of  a  change 
of  fashion  makes  itself  felt  throughout  the  whole  of 
society,  and  has  a  sensible   effect   upon   production.  .  .  . 


238  FASHION  IN  HOUSES 

Amongst  the  lower  classes  of  the  people  change  of 
fashion  affects  their  dress  only ;  amongst  the  well-to-do 
it  affects  also  the  decorations  of  their  houses.  ...  It 
is  obvious  that  these  never-ceasing  changes  in  furniture, 
carpets,  etc.,  must  involve  an  enormous  loss  of  work  and 
material." 

After  these  remarks,  which  have  been  considerably 
abbreviated,  Kautsky  turns  to  another,  to  some  extent 
cognate,  subject.  "Again,"  he  says,  "we  will  instance  a 
form  of  waste  which  is  peculiar  to  capitalistic  society, 
and  is  caused  by  the  growth  of  large  cities.  .  .  .  Farms 
become  vacant,  and  their  former  inhabitants  require  new 
dwellings  in  towns.  New  houses  must  consequently  be 
built,  not  on  account  of  an  increase,  but  of  a  displacement 
of  population,  caused  not  by  the  attractions  of  a  more 
healthy,  more  agreeable,  or  more  fertile  situation,  nor 
by  a  wish  to  make  labour  more  productive,  but  by  the 
desire  to  be  nearer  to  the  market,  where  all  merchandise, 
even  that  of  labour,  has  more  chance  of  finding  customers 
than  in  a  solitary  place  at  a  distance  from  the  market." 

After  showing  how  continual  are  the  changes  in  great 
cities,  especially  in  their  central  parts,  Kautsky  concludes 
thus : — "  Here,  as  elsewhere,  capitalistic  production  shows 
itself  to  be  a  revolutionary  system  which  possesses  no 
permanent  character.  It  destroys  to-day  what  it  created 
yesterday ;  it  seeks  to  throw  aside  everything  even  before 
it  has  become  useless,  and  declares  with  a  light  heart  that 
yesterday's  labour  was  in  vain,  and  that  to-morrow  more 
labour  will  be  wasted."  ^  It  cannot  be  denied  that  there  is 
an  element  of  truth  in  this  statement.  No  doubt  fashion  is 
the  cause  of  extravagance  ;  no  doubt  also  transformations 
of  cities  are  often  unjustifiable,  and  are  carried  out  too 
abruptly.  It  is  right  that  people  should  be  warned  against 
a  frivolous  propensity  to  change  in  their  dress,  their 
furniture,  or  their  houses;  it  is  right  also  that  public 
authorities  should  be  put  on  their  guard  against  prema- 
ture demolitions  and  unnecessary  changes  in  towns.     Yet, 

*  Karl  Kautsky :  Le  Marxism^  son  critique  Bernstein^  traduction 
de  Martin  Leray,  pp.  201-208,  Paris,  1900. 


THE  LOSS  INSIGNIFICANT  239 

whilst  acknowledging  that  they  are  to  some  extent 
justified,  it  is  obvious  that  Kautsky's  complaints  are 
greatly  exaggerated.  It  is  only  a  very  limited  number 
of  persons  who  are  much  affected  by  the  changes  of 
fashion,  and  they  are  concerned  far  more  with  the 
appearance  and  the  make  of  the  articles  than  with  their 
material.  It  is  the  same  fabrics,  as  a  rule,  to  which  year 
after  year  a  new  appearance  or  a  different  cut  is  given, 
and  the  amount  of  social  work  absorbed  in  this  process  is 
of  very  small  importance.  The  vast  majority  of  manu- 
factures are  not  affected,  and  the  great  mass  of  the  people 
are  uninfluenced  by  these  changes.  Unfashionable  articles, 
also,  are  not  wasted,  as  Kautsky  imagines ;  they  find  a 
market  amongst  the  less  fashionable  or  less  well-off 
classes  of  society,  or  they  are  ingeniously  and  inexpen- 
sively rejuvenated.  Under  modern  systems  of  production, 
nothing  is  really  wasted,  and  the  art  of  utilising  remnants 
is  carried  to  the  utmost  perfection.  However  high  may 
be  the  estimate  of  the  extravagance  attributable  to  fashion, 
and  however  great  the  sacrifices  it  imposes  upon  its 
devotees,  its  cost  certainly  would  not  amount,  all  told, 
to  I  per  cent,  of  the  total  social  production.  But  the 
phenomenon  of  fashion  deserves  attention  from  a 
more  lofty  point  of  view :  philosophically  considered, 
it  is  seen  to  be  allied  to  those  faculties  whose  development 
is  essential  to  the  progress  of  humanity ;  it  is  closely 
allied  to  the  desire  for  innovation  and  the  wish  to  imitate 
that  which  appears  to  be  the  best ;  and  no  society  can 
make  much  progress  if  these  aspirations  are  not  widely 
diffused  and  strongly  felt.  Desire  for  innovation  is 
necessary  to  secure  the  improvement  of  methods  of 
production,  and  the  taste  for  fashion  is  but  one  of  its 
forms. 

Primitive  societies  do  not  exhibit  this  phenomenon ; 
they  show  but  little  inclination  to  abandon  traditional 
customs  with  respect  to  clothing,  furniture,  and  housing,  or 
to  modify  their  habits  in  relation  to  education  and  com- 
merce. The  waste  caused  by  fashion,  insignificant  in 
comparison  with  the  total  national  production,  is,  in  fact, 


240  HOPELESS  TORPOR 

an  unavoidable  consequence  of  the  aspirations  referred  to, 
which  exert  so  powerful  and  beneficial  an  influence  upon 
the  advance  of  the  technical  arts  and  the  well-being  of 
society.  Fashion,  moreover,  is  intimately  connected 
with  freedom,  and,  except  by  moral  suasion,  its  influence 
can  neither  be  suppressed  nor  lessened  without  endanger- 
ing personal  liberty.  Judging  from  Kautsky's  writing, 
collectivism  appears  to  wish  to  re-establish  compulsorily  a 
kind  of  existence  which  by  its  monotony  and  insipidity 
would  plunge  mankind  into  hopeless  torpor. 

The  movement  of  populations  into  towns  is  chiefly 
caused  by  the  profound  changes  effected  by  inventions  and 
their  scientific  application  to  the  technical  arts.  Collec- 
tivism, if  improvement  in  production  continues,  could  not 
hope  to  be  free  from  this  tendency,  and  the  passage  quoted 
above  shows,  as  indeed  does  the  whole  of  the  collectivist 
doctrine,  that  it  is  incompatible  with  liberty  of  choice  of 
domicile. 

No  clear-sighted  and  judicious  observer  would  deny 
that  the  modern  system  of  production  involves  a  certain 
amount  of  waste,  or  that  the  grandiose  descriptions  some- 
times given  of  economic  progress  require  some  modifica- 
tion ;  but  collectivism  offers  no  remedy  for  the  evil.^  It 
has  been  shown  how  little  importance  attaches  to  the 
assertion  that  the  length  of  the  work-day  would  be  reduced 
by  suppressing  the  production  of  articles  of  luxury,  and 
the  caprices  of  fashion.  All  that  might  be  gained  in  this 
way  would  be  more  than  counterbalanced  by  the  loss  of 
energy  and  the  evils  inseparable  from  authoritative  and 
despotic  organisation.  It  has  been  demonstrated,  also, 
how  by  the  imposition  of  equality  in  social  conditions, 
all  emulation  would  be  destroyed ;  how  in  the  proposed 

*  See  Traitd  thiorique  et  pratique  d^Economie  politique^  3rd  ed., 
vol.  i.,  pp.  480-509,  chap,  ix.,  by  P.  Leroy  Beaulieu,  The  heading 
of  this  chapter  is :  "  Of  the  progress  of  production,  of  its  variable 
course,  and  of  its  eventual  limits  ;  current  illusions  about  economical 
progress,  the  deductions  to  be  made."  Special  attention  is  also 
directed  to  the  section  of  this  chapter  headed  "  Economic  progress  is 
always  far  less  in  reality  than  in  appearance  ;  examples  of  illusions 
on  this  point ;  causes  of  losses  in  contemporaneous  production,  etc." 


CONDEMNED  BY  HISTORY  241 

system  no  room  could  be  found  for  the  liberty  of  minorities 
or    of    individuals,    and    how   its    cumbrous    machinery, 
bureaucratic  and   wanting  in  spontaneity  as  it  must  be," 
would  impede  all  material  progress. 

It  is,  indeed,  impossible  to  find  in  the  works  of  the 
writers  who  preach  or  interpret  the  collectivist  doctrine,  a 
single  valid  reason  why  the  human  race  should  embark 
upon  an  adventure  which  already  stands  condemned  by 
history  and  common  sense. 


BOOK    III 


CHAPTER   I 

The  Quintessence  of  Socialism  as  a  source  of  information.  Bernstein's 
criticism  of  Marxian  doctrine.  Socialisme  theorique  et  Sociale 
ddmocratie pratique.  Concentration  of  wealth  and  concentration 
of  industry.    Agricultural  holdings  in  the  German  Empire. 

On  the  Evolution  of  Socialism  since  1895. 

Since  the  first  publication  of  Le  Collectivisme,  in  1884, 
much  has  happened.  In  some  places,  particularly  in 
Belgium,  socialism  has  endeavoured  to  make  use  of  the 
co-operative  movement  as  a  lever  for  the  promotion  of 
collectivism,  and  in  other  places,  especially  in  England, 
efforts  have  been  made  to  develop  the  system  of  municipal 
trading,  as  another  means  of  gaining  the  same  object. 

Frequent  reference  has  been  made  to  the  Quintessence 
of  Socialism,  by  Schafifle.  This  book,  which  was  published 
anonymously,  was  welcomed  with  enthusiasm,  adopted 
as  a  kind  of  collectivist  breviary  by  the  whole  body  of 
social  democrats  in  Germany,  and  introduced  into  France 
by  a  translation  made  by  Malon,  one  of  the  most  sincere, 
orthodox,  and  active  of  collectivists. 

In  a  subsequent  publication,  Schaffle  declared  that 
it  was  merely  an  impartial  exposition  of  the  practical 
working  of  a  new  society  formed  upon  the  principles  of 
collectivism,  and  must  not  be  taken  as  an  expression  of 
his  own  opinion,  and  in  a  complementary  or  explanatory 
sequel,  he  states  his  belief  that  the  programme  of 
democratic  socialism  is  incapable  of  practical  application. 

The   fact   remains,  however,  that  the    Quintessence  of 

245 


246  "BERNSTEIN^ 

Socialism  is  not  only  a  careful  and  sympathetic  attempt 
made  by  a  very  intelligent  author  to  explain  the  "  positive  " 
side  of  the  doctrine  of  collectivism,  but  it  is  the  only 
document  in  which  such  an  attempt  has  been  made,  and 
is  therefore  the  best  available  source  of  information,  when 
making  an  enquiry  into  the  methods  proposed  for  the 
practical  application  of  the  collectivist  theory.^ 

The  medley  of  obscure  ideas  which  goes  by  the  name 
of  Marxian  or  "scientific"  socialism,  was,  towards  the 
close  of  the  nineteenth  century,  accepted  as  a  revelation, 
first  by  the  German  socialists,  and  afterwards  by  those  of 
France  and  other  countries.  Differences  of  opinion 
appeared  from  time  to  time,  but  they  had  reference  rather 
to  questions  of  practical  application  and  tactics,  than  to 
the  doctrine  itself ;  and  although,  for  electoral  reasons  and 
in  order  to  make  them  more  attractive  to  the  peasants 
and  the  lower  middle  classes,  some  of  Marx'  proposals 
were  attenuated,  or  their  realisation  relegated  to  the 
distant  future,  these  infidelities,  which  appear  to  have 
been  merely  concessions  to  the  political  exigencies  of  the 
moment,  in  no  way  vitiated  the  substance  of  the  doctrine. 
It  was  far  otherwise,  however,  in  the  case  of  the  startling 
publications  issued  by  Bernstein  in  1898-9;  not  only 
was  he  one  of  the  most  active  and  highly  esteemed 
writers  of  the  socialist  party,  but,  as  editor  of  Vorwdrts 
and  the  Neue  Zeit  and  collaborator  with  Kautsky, 
the  most  staunch  exponent  of  Marxism,  he  was,  as  it 
were,  the  trusted  missioner  of  the  founders  of  "  scientific 
socialism." 

Engels  received  from  Marx  the  commission  to  publish 
his  MSS.,  and  thus  became  his  intellectual  legatee ;  and 
Bernstein,  as  he  himself  says,  was  in  his  turn  the  intel- 
lectual legatee  of  Engels.     "  I  know  well,"  he  says,  "  that  it 

^  The  most  eminent  socialists  have  admitted  that  the  Quintessence 
of  Socialism  is  a  socialistic  work.  Thus,  Robertus  Jagetzow,  who  is 
considered  by  some  people  to  be  the  true  father  of  collectivism,  writes  : 
"  To-day,  without  being  quoted,  I  am  being  robbed  by  SchafBe  and  by 
Marx."  See  preface  by  F.  Engels  to  Le  capital  by  Karl  Marx,  Paris, 
1900,  voL  ii. 


A  REPLY  TO  BERNSTEIN  247 

[ie.,  his  own  book]  differs  on  many  important  points  from 
the  theories  of  Marx  and  Engels,  men  whose  writings  have 
largely  influenced  my  socialistic  thought,  and  of  whom  one, 
Engels,  not  only  honoured  me  with  his  personal  friendship 
until  his  death,  but  also  gave  evidence  of  his  great  con- 
fidence in  me  by  his  testamentary  dispositions."  ^  Kautsky 
also,  who  published  a  reply  to  Bernstein's  book,  acknow- 
ledges the  value  of  his  services,  and,  before  attempting  to 
refute  his  arguments,  testified  to  the  pristine  purity  of  his 
doctrine  and  to  the  faithfulness  of  his  propagandism  of 
socialism.^  Bernstein  recognises  that,  in  his  criticisms  of 
Marxism,  he  is,  for  the  most  part,  only  repeating  what  has 
already  been  said  by  others,  but  refrains  from  giving  a  list 
of  these  authors,  on  the  ground  that  it  would  contain 
socialists,  both  of  the  present  and  the  preceding  genera- 
tion, of  all  countries  and  all  schools,  and  would  therefore 
be  too  long.^  He  does  not,  however,  refer  to  the  impor- 
tant fact,  that  such  a  list  would  also  include  economists, 
and  his  adversary,  Kautsky,  referring  on  several  occasions 
to  the  Essai  sur  la  repartition  des  richesses^  reminds 
him  that  he  has  merely  followed  the  route  indicated  in 
that  work.  "  Leroy  Beaulieu  himself,"  writes  Kautsky, 
"  is  the  bourgeois  optimist  in  optima  formd^  and  the 
predecessor  of  Bernstein  on  the  ground  we  are  now  con- 
sidering. Whilst  this  optimist  [that  is,  Leroy  Beaulieu]  who 
sees  everything  in  a  rosy  light,  only  proceeds  by  cautiously 
groping  his  way,  and  with  much  circumspection,  the 
socialist  Bernstein  light-heartedly  welcomes  any  one, 
wherever  he  may  come  from,  provided  he  speaks  against 
the  doctrine  of  socialism."  ^  Bernstein's  criticisms,  there- 
fore, are  not  original,  but  have  been  before  the  public 
for  more  than  twenty  years.  How  is  it,  then,  that  his  book, 
written   no   doubt   with    ability   and   verve,   but  with    a 

^  Bernstein's  Socialisme  thdorique  et  Sociale  Democratic  pratique, 
traduction  par  Alexandre  Cohen,  1900,  p.  42. 

^  Karl  Kautsky,  Le  Marxism  et  son  critique  Bernstein,  traduction 
par  Martin  Leroy,  1900,  pp.  30,  31. 

^  Bernstein,  op.  cit.,  p.  29.  *  P.  Leroy  Beaulieu,  op,  cit. 

^  Kautsky,  op.  cit,,  p.  184. 


248  THE  HISTORICAL  THEORY 

dialectic  rather  less  convincing  than  that  of  previous 
writers,  attained  so  great  a  celebrity  ?  The  explanation  is, 
that  whilst  very  little  attention  was  paid  to  criticism  of 
Marxism  so  long  as  it  emanated  from  economists,  public 
attention  was  at  once  attracted  when  similar  criticisms 
were  uttered  by  a  prominent  socialist  The  interest 
attaching  to  Bernstein's  book  is,  therefore,  rather  sub- 
jective than  objective,  and  is  owing  more  to  his  personality 
and  antecedents  than  to  its  contents.  It  will,  however,  be 
of  interest  to  trace  its  principal  features  and  note  the 
conclusions  arrived  at.  It  contains  five  chapters :  the  first 
deals  with  the  fundamental  basis  of  Marxian  socialism, 
and  is  an  exposition  (with  many  reservations,  but  with  no 
formal  repudiation)  of  the  principles  upon  which  the  so- 
called  "  scientific  socialism "  is  founded.  These  are 
described  as  being  the  materialistic  idea  of  history,  which, 
it  is  said,  is  the  most  important,  which  gives  life  to  the 
whole  doctrine,  and  with  which,  indeed,  the  principle  itself 
stands  or  falls, — the  doctrine  of  class  warfare^  the  theory  of 
^^  plus-value"  and  the  theory  of  bourgeois  production^  with  the 
evolutionary  tendencies  it  involves. 

In  speaking  of  the  historical  theory,  Bernstein  acknow- 
ledges that  it  is  greatly  exaggerated,  and  that  it  is  far  too 
negligent  of  the  influence  of  factors,  other  than  economic, 
upon  the  progress  of  humanity.  This  neglect  he  attributes 
partly  to  tactical  and  partly  to  doctrinal  reasons,  and  he 
points  out  that  far  less  importance  was  attached  to  the 
influence  of  these  factors  by  Marx  and  Engels  in  their 
earlier  than  in  their  later  writings ;  for  his  own  part, 
Bernstein  declares  that  he  feels  compelled  "to  take 
into  account,  in  addition  to  the  evolution  of  productive 
power  and  of  the  conditions  of  production,  juridical 
and  moral  ideas,  the  historic  and  religious  traditions  of 
each  age,  the  geographical  and  other  natural  influences  of 
which  human  nature  itself,  with  its  spiritual  aptitudes,  forms 
a  part."^  Marx'  astonishing  exclusiveness  of  mind  and 
inferiority  of  intellect  are  conspicuous  in  his  materialistic 
theory  of  history,  in  which  he  makes  all  human  develop- 
*  Bernstein,  op.  cit.,  pp.  13-14. 


MARXISM  AND  HEGEL  249 

ment  depend  upon  production  and  exchange.  Thus,  the 
advent  and  progress  of  Christianity,  the  Reformation, 
Mahommedanism,  and,  in  another  order  of  ideas,  the 
Renaissance,  are  all  ignored  as  factors  of  no  importance 
in  the  development  of  humanity  ! 

The  second  chapter  of  Bernstein's  book,  which  is 
headed  *'  Le  Marxism  et  la  Dialectique  Hegelienne,"  is 
divided  into  two  parts,  which  have  no  connection  with  each 
other ;  one  is  on  "  The  Pitfalls  of  Hegelian  Dialectic,"  and 
the  other  on  "  Marxism  and  Blanquism." 

Hegel,  whose  ideas  and  methods  were  so  much  in 
the  ascendant  between  1820  and  1850  or  i860,  has  quite 
lost  the  authority  he  then  possessed  ;  and  Marx,  when  he 
thought  that  by  adopting  the  Hegelian  method  of 
dialectic  he  was  providing  an  unassailable  philosophic 
basis  for  his  ideas,  was,  in  reality,  building  upon  a 
foundation  that  was  insecure  and  perishing.  Bernstein 
recognises  his  infatuation  with  ideology,  and  speaks  of 
the  danger  of  "  arbitrary  construction "  and  of  "  auto- 
suggestion" in  the  interpretation  of  history ;  he  also 
reproaches  Marx  with  "an  almost  incredible  neglect  of 
the  most  palpable  facts,"  with  "  a  mistaken  appreciation 
of  events,"  and  with  his  ignorance  of  the  necessities  of 
modern  life. 

From  another  point  of  view,  Bernstein  declares  that 
Marxism  has  never  known  how  to  rid  itself  completely 
of  the  naif  conception  of  the  Blanquists,  which  attri- 
butes "  unlimited  creative  power  to  revolutionary  political 
action,  and  to  its  concrete  form  of  revolutionary  expro- 
priation." 

There  is  also  in  this  chapter  an  admission  which  affects 
another  collectivist,  less  suspect  than  Bernstein  himself. 
"  Engels,"  he  writes,  "  at  the  close  of  his  life,  in  his  preface 
to  Les  luttes  de  classes,  clearly  recognises  the  error 
that  Marx  and  himself  had  committed  in  estimating  the 
duration  of  political  and  social  evolution.^ 

The  third  chapter  is  headed  :  "  The  Economic  Evolution 
of  Modern  Society."  In  this  chapter  the  author  attacks 
1  Bernstein,  op,  cit.^  pp.  38,  39,  44,  45,  46,  52,  and  55. 


250  BERNSTEIN  AND  LABOUR-VALUE 

the  predictions  of  Marx,  rather  than  his  principles,  and 
shows  that  during  the  fifty  years  that  have  passed  since 
his  first  writings  were  published,  and  the  thirty  years  since 
his  doctrine  was  co-ordinated  in  the  first  volume  of  his 
famous  book,  Das  Kapital^  the  actual  evolution  of  society 
has  been  in  a  direction  altogether  contrary  to  that  pre- 
dicted by  him.  It  is  on  this  point  that  Bernstein's 
criticism  is  absolutely  destructive  of  the  theory  so  assidu- 
ously elaborated  by  Marx  and  imposed  by  him,  not  only 
upon  the  ignorant  and  prejudiced  populace,  but  also  upon 
the  shallow  philosophers  who  crowd  and  encumber  the 
world  of  thought.  This  chapter  commences  with  a  section 
headed :  "  Upon  the  Purport  of  the  Marxian  Theory  of 
Value,"  from  which  it  is  clear  that  Bernstein  recognises,  if 
he  does  not  say  so  in  terms,  that  this  theory  has  no  real 
foundation  or  justification  in  facts.  "  Just  so  far,"  he  says, 
"  as  a  commodity  or  a  class  of  commodities  is  considered, 
the  Marxian  value  loses  all  concrete  meaning,  and  is  no 
more  than  a  purely  ideal  conception.  But  under  these 
conditions,  what  becomes  of  '  plus-value '  ?  This  consists, 
according  to  the  Marxian  doctrine,  of  the  difference 
between  the  labour- value  of  the  products  and  the  payment 
of  the  labour-force  employed  for  their  production.  It  is 
therefore  evident  that  from  the  moment  that  labour-value 
is  nothing  more  than  an  ideal  formula  or  a  scientific 
hypothesis,  *  plus-value '  becomes,  a  fortiori,  nothing  but  a 
mere  dictum  based  upon  a  hypothesis."  ^  This  is,  in  effect, 
a  formal  condemnation  of  the  Marxian  theories  of  "  value  " 
and  "  plus-value."  Again  :  "  The  theory  of '  labour- value,' " 
Bernstein  says,  "  leads  to  error,  because  it  is  always  repre- 
sented as  being  the  measure  of  the  extent  of  the  exploita- 
tion of  the  labourer  by  the  capitalist — a  conclusion  which 
is  also  encouraged,  amongst  other  things,  by  the  representa- 
tion of  the  quota  of '  plus-value '  as  being  also  the  quota  of 
exploitation,  etc.  It  is  already  clear,  from  what  precedes, 
that  such  a  measure  would  be  a  false  one,  even  assuming 
that  society  could  be  considered  as  an  entity,  and  that  the 
total  amount  paid  as  wages  could  be  contrasted  with  the 
*  Bernstein,  op.  ciLy  p.  66. 


PLUTOCRACY  AND  THE  MIDDLE  CLASSES  251 

remainder  of  the  social  revenue.  The  Marxian  theory  of 
value  is  no  more  capable  of  establishing  a  norm  by  which 
to  judge  of  the  justice  or  the  injustice  of  the  distribution 
of  the  products  of  labour  than  the  atomic  theory  is  capable 
of  establishing  a  standard  for  estimating  the  merits  or  the 
defects  of  a  work  of  sculpture.  Is  it  not,  now,  the  case 
that  the  best  paid  workmen — those  who  belong  to  the 
aristocracy  of  labour — are  to  be  found  in  those  employ- 
ments in  which  the  quota  of  '  plus-value '  is  very  large  ; 
and  on  the  other  hand,  the  most  infamously  sweated 
labourers,  in  those  in  which  this  quota  is  at  its 
lowest?"!  This  portion  of  Bernstein's  book,  however, 
did  not  attract  much  notice;  the  part  which  particularly 
arrested  public  attention  was  that  in  which  he  examined 
Marx'  prophecy  of  the  increasing  concentration  of  wealth 
and  "the  inevitable  destruction  of  capitalistic  pro- 
duction." 

In  this,  as  in  other  instances,  Marx  did  not  himself 
originate  the  theory :  he  adopted  and  subjected  it  to  a 
minute  examination,  and  then  placed  it  before  the  public 
in  every  possible  shape,  and  in  the  most  impressive  way. 
It  was  Sismondi,  an  economist  with  socialistic  proclivities, 
who,  at  the  beginning  of  the  nineteenth  century,  formulated 
the  so-called  axiom  of  the  increasing  concentration  of 
wealth  and  the  concomitant  increase  of  poverty  of  the 
wage-earning  classes,  under  the  new  industrial  regime.  He 
says :  "  In  this  way,  then,  by  the  concentration  of  wealth 
in  the  hands  of  a  small  number  of  owners,  the  domestic 
market  will  become  more  and  more  contracted,  and  trade 
will  be  forced  more  and  more  to  search  for  outlets  in 
foreign  markets,  which  are  liable  to  revolutionary  changes." 
In  this  sentence  is  to  be  found  the  germ  of  Marx' 
whole  theory,  both  of  industrial  crises,  and  of  a  plutocracy 
destined  to  absorb  and  destroy  the  middle  classes. 
Marx  was  certainly  not  ignorant  of  this  passage,  and 
it  is  curious  that  it  was  his  friend  and  intellectual 
legatee,  Engels,  who  reproduced  it,  in  the  preface  to  the 

'  Bernstein,  op.  cit.,  pp.  75-76. 


252  INCOMES  IN  PRUSSIA 

second  volume  of   Das    Kapital,    which    was    published 
posthumously.  1 

Arguing  from  the  assumed  concentration  of  wealth, 
the  absorption  of  intermediate  by  large  capitalists,  and 
of  the  latter  by  financial  magnates,  Marx  came  to  the 
conclusion  that  the  capitalistic  system  would  crumble  to 
pieces  under  its  own  weight.  Bernstein  devotes  himself 
to  proving  that  this  theory,  generally  known  as  the 
"  catastrophic  "  theory,  has  been  entirely  falsified  by  events, 
and  to  the  exposition  of  the  error  of  the  social  democratic 
belief,  that  concentration  of  wealth  proceeds  pari  passu 
with  that  of  industrial  enterprise.  He  shows  that  there  is 
a  confusion  of  ideas  between  the  concentration  of  industry 
and  that  of  wealth,  which  are,  in  reality,  two  very  different 
things,  and  points  out  how  strongly  antagonistic  the 
influence  of  the  joint  stock  company  system  is  to  the 
concentration  of  wealth — an  influence  which  is  quite 
ignored  by  socialists.  He  then  quotes  figures  which  show 
that  the  movement  towards  the  concentration  of  industry 
is  quite  independent  of  that  towards  the  concentration  of 
wealth.  He  also  shows  that  in  England  the  joint  stock 
capital  invested  in  the  highly  concentrated  cotton  and 
wool  industries,  is  divided  amongst  a  very  large  number  of 
proprietors,  whose  individual  holdings  are  small.  Quoting 
from  the  income-tax  returns,  he  says:  "  In  Prussia,  in  1854, 
there  were,  as  is  known  to  readers  of  Lassalle,  only  44,407 
individuals,  in  a  population  of  16,333,000,  with  an  income 
of  more  than  ;^i50.  In  the  year  1894-95,  ^^  ^  population 
of  33,000,000,  321,296  were  reckoned  as  having  an  income 
of  more  than  ;^I50.  In  1897-98,  their  number  had 
increased  to  347,328.  Whilst  the  population  doubled, 
the  number  of  individuals  enjoying  a  certain  competence 
increased  sevenfold.  Even  after  making  allowance  for  the 
fact  that  the  figures  for  the  provinces  annexed  in  1866 
show  that  the  number  of  those  possessing  a  competence 

'  See  Le  Capital,  by  Marx,  vol.  xi.,  preface  by  Engels,  French 
translation,  p.  20.  The  extract  quoted  above  as  given  in  this  trans- 
lation was  printed,  according  to  Engels,  in  the  Nouveaux  Principes 
d'Economie  Politique^  by  Sismondi,  Edition  i8ig,  vol.  i.,  p.  336. 


PROPERTY  OWNERS  INCREASING  IN  NUMBER  253 

are  generally  larger  than  those  given  for  old  Prussia, 
properly  so  called,  allowing  also  for  the  fact  that  the  price 
of  provisions  had  risen  considerably  in  the  interval,  the 
proportion  of  the  more  well-to-do  to  the  total  population 
still  shows  an  increase  of  two  to  one;  and  if  a  further 
period  is  taken,  it  is  found  that  in  the  fourteen  years,  1876 
to  1890,  side  by  side  with  a  total  increase  of  20-56  per 
i(X)  of  tax-payers,  the  incomes  between  ;^ioo  and  ;^iooo 
— the  bourgeoisie  in  easy  circumstances  and  the  smaller 
bourgeoisie — increased  by  31-52  per  cent.  The  class  of 
proprietors  properly  so  called — that  is,  of  those  possessing 
incomes  of  ;^300  and  over — increased  during  the  same 
period  by  58-47  per  cent.  Five-sixths  of  that  increase  is 
attributable  to  the  moderate  incomes  between  ;^300  and 
;^iooo.  The  proportions  are  similar  in  Saxony,  the  most 
industrial  of  German  States.  Here,  the  number  of  incomes 
between  ;^8o  and  £160,  rose  from  62,140  in  1879,  to  91.124 
in  1890,  and  that  of  incomes  between  ;^i6o  and  ;6^48o,  from 
24,414  to  38,841,  during  the  same  period."^ 

The  evidence  of  these  figures,  taken  from  the  statistics 
of  income-tax  in  Prussia  and  Saxony,  are  quite  conclusive 
against  the  validity  of  Marx'  theory  that  a  progressive 
disappearance  of  the  middle  classes  and  increasing 
pauperisation  are  necessary  consequences  of  a  capitalistic 

Bernstein  sums  up  thus  : — "  The  assertion  that  eco- 
nomic evolution  at  the  present  time  tends  to  a  relative  or 
even  absolute  diminution  in  the  number  of  owners,  is 
altogether  erroneous.  Their  number  increases  both 
absolutely  and  relatively.  If  the  movement  and  future 
prospects  of  social  democracy  depended  upon  the  fact  of 
the  diminution  in  the  number  of  proprietors,  it  might  in 
that  case  resign  all  hope " ;  ^  the  idea  of  "  the  absorption 
of  all  '  plus-value '  by  a  continually  diminishing  number  of 
mammoth  capitalists,"  he  treats  as  a  superstition. 

This  socialistic  critic  of  Marx  also  considers  the  idea 
that  "  shareholders  constitute  a  new  class  of  idlers,"  as  of 
no  importance ;   he  is  prepared  to  admit  that  "  all  share- 

'  Bernstein,  op.  cz'f.,  pp.  84-85.  ^  Bernstein,  op.  ci/.,  p.  87. 


254  "SHARES'* 

holders  are  not  idlers,"  and  that  even  if  they  were,  Marx' 
theory  would  be  in  no  way  strengthened.  In  this  con- 
nection, Bernstein  gives  expression  to  a  philosophical 
generalisation  which  is  in  harmony  with  the  nature  of 
things,  and  deserves  reproduction.  "  A  *  share,' "  he  says, 
"  is  not  merely  capital :  it  is  capital  in  its  most  complete — 
it  might  be  said  its  most  sublimated — form.  It  is  the  draft 
drawn  by  national  or  universal  thrift  upon  surplus  labour 
freed  from  all  contact  with  the  trivialities  of  professional 
activity.  It  is,  so  to  speak,  dynamic  capital.  And  if  the 
increasing  number,  or,  as  they  may  now  be  called,  the 
battalions,  of  shareholders,  live  only  as  idle  recipients  of 
dividends,  yet,  by  their  mere  existence,  by  the  nature  of 
their  expenditure,  and  by  the  importance  of  their  social 
surroundings,  they  constitute  a  very  potent  factor  in  the 
economic  life  of  society.  The  '  share '  re-establishes  in  the 
social  ladder,  the  intermediate  steps  which  the  concentration 
of  enterprise  has  destroyed."  ^ 

As  to  the  idleness,  with  which  shareholders  as  a  body 
are  charged,  Bernstein  might  have  added  that  shares  and 
debentures  provide  means  whereby  men  engaged  in  pro- 
fessional work  can  take  part  in  enterprises  of  material 
importance  to  the  life  and  progress  of  the  world.  Far  from 
being  idle,  the  great  mass  of  shareholders  and  creditors  of 
the  state  have,  as  a  rule,  absorbing  occupations.  If  some 
of  them  are  idlers,  or  even  hereditary  idlers,  it  has  been 
shown  that  this  is  by  no  means  an  evil,  provided  that 
their  number  is  not  excessive  and  that  they  are  not 
protected  from  the  consequence  of  their  own  errors  by  an 
artificial  system  of  jurisprudence.  In  the  absence  of  a 
leisured  class,  the  arts  which  embellish  life  could  not 
prosper,  and  a  number  of  inventions,  which  might  be  of 
popular  utility,  would  never  be  heard  of,  or  would  be 
indefinitely  delayed. 

Consideration   of  the   actual  character   of  production 

under  the  existing  social  system,  also  helps  to  destroy  the 

assertion  that  an  enormous  and  always  increasing  proportion 

of  products  at  the  present  time  fall  to  groups  of  "  pluto- 

'  Bernstein,  op.  cit.^  pp>  Qi*  93»  94. 


INCREASE  OF  PRODUCTION  255 

crats,"  or  "  capitalist  magnates ; "  on  this,  Bernstein  makes 
the  following  decisive  observation  ; — "  That  which  chiefly 
characterises  modern  production,  is  the  great  increase  of 
the  productivity  of  labour.  The  result  is  a  no  less  con- 
siderable increase  in  the  whole  production  of  objects  and 
commodities  for  consumption}  What  becomes  of  this 
wealth?  or,  to  put  the  question  more  precisely.  What 
becomes  of  the  surplus  product  which  industrial  workmen 
produce  in  excess  of  their  own  proper  consumption  as 
limited  by  their  wages  ?  The  '  magnates  of  capital '  may 
well  possess  stomachs  ten  times  more  capacious  than  those 
with  which  they  are  credited  by  popular  belief,  and  may 
employ  ten  times  as  many  domestics  as  they  actually 
have:  even  so,  their  consumption  would  weigh  but  little 
in  comparison  with  the  total  actual  national  production. 
It  must  not  be  forgotten  that  the  great  capitalistic  pro- 
duction is,  before  all  things,  production  for  the  masses. 
What,  then,  becomes  of  the  commodities  which  the  magnates 
and  their  households  cannot  consume  ?  If  in  some  way 
or  other  they  do  not  reach  the  proletariat,  they  must  be 
absorbed  by  the  other  classes.  Either  there  must  be  a 
diminution,  always  becoming  more  and  more  accentuated, 
of  the  number  of  capitalists,  with,  at  the  same  time,  an 
increase  of  the  well-being  of  the  proletariat,  or  there  must 
be  a  numerous  middle  class  ;  these  are  the  only  alternatives 
which  the  uninterrupted  increase  of  production  leaves 
open."  ^  This  is  an  argument  to  which  there  can  be  no 
reply. 

If  the  effect  of  the  division  of  capital  by  means  of  the 
shares  and  debentures  of  joint  stock  companies,  is  to 
restore  the  numerous  steps  in  the  social  ladder,  which  the 
concentration  of  enterprise  had  seemed  to  destroy,  the 
apprehension  that  all  industries  will  be  concentrated,  and 
that  the  smaller  industries  will  disappear,  is  clearly 
unfounded.  The  assertion  that  this  would  be  the  case  has 
already  been  refuted,  and  Bernstein  in  that  part  of  his 
work  entitled  "  Various  Classes  of  Industries  by  which  Social 

*  These  words  are  italicised  in  the  original. 
^  Bernstein,  op.  cit.^  pp.  88-89. 


256  CONCENTRATION  OF  INDUSTRY 

Wealth  is  Produced  and  Distributed,"  brings  forward  further 
evidence  in  opposition  to  this  prediction.  He  shows,  by 
analysing  the  reports  of  the  factory  inspectors,  that  in 
England,  where  enterprise  is  more  concentrated  than  any 
other  European  country,  the  average  number  of  workers 
employed  per  factory  is  by  no  means  large,  and  that  if  in 
the  cotton  industry. this  average  continued  to  increase  at 
the  same  rate  as  it  did  between  1868,  when  Marx  con- 
structed his  tables,  and  1899,  it  would  take  nearly  a 
century  before  the  number  of  workers  per  factory  would 
be  doubled,  whilst  the  total  number  of  factories  would 
in  the  same  time  have  diminished  only  by  the  negligible 
proportion  of  i'5  per  cent 

The  facts,  with  regard  to  the  wool  industry,  point  even 
more  decisively  to  the  same  conclusion,  and  taking  the 
report  of  the  factory  inspectors  upon  all  the  textile  factories 
throughout  Great  Britain,  Bernstein  shows  that,  supposing 
the  same  rate  of  increase  to  be  maintained,  it  would 
require  about  seventy  -  five  years  for  the  number  of 
operatives  per  factory  to  double  itself. 

These  facts  reduce  the  phenomenon  of  the  concentra- 
tion of  industry  to  its  true  proportions ;  they  show  that 
it  is  of  far  less  importance  than  is  generally  supposed,  and 
that  it  is  in  no  way  disquieting. 

The  illustrations  which  Bernstein  gives  are  valuable, 
both  on  account  of  the  minute  accuracy  of  German 
statistics,  and  also  because  Germany  is,  of  all  European 
countries,  that  in  which  industrial  progress  has  been  most 
striking  during  the  years  1880  to  1900;  yet  even  here 
the  great  majority  of  German  operatives  are  still  em- 
ployed in  small  or  medium  establishments.  It  is  true 
that  between  1882  and  1895  the  proportion  of  industrial 
workers  in  Prussia  employed  in  the  large  industries 
increased  from  28-4  per  cent,  to  38  per  cent. ;  but  besides 
the  fact  that  this  period  was  altogether  exceptional,  and 
that  the  development  of  large  industries  was  far  less  in  the 
rest  of  the  empire,  it  by  no  means  follows  that  the  smaller 
industries  were  in  process  of  disappearing  during  this 
period.    The  tendency  of  the  larger  industries  has  been 


LANDED  PROPERTY  IN  GERMANY         257 

rather  to  absorb  the  increase  of  population,  than  to  attract 
workers  from  smaller  establishments ;  indeed,  it  is  very 
frequently,  if  not  generally  the  case,  that  the  larger 
industries,  in  place  of  superseding  the  smaller,  actually 
add  to  their  number ;  and  Bernstein  shows  that  notwith- 
standing the  great  development  of  large  industries  in 
Germany  between  1882  and  1895,  the  number  of  operatives 
employed  in  the  smaller  industries,  not  only  showed  no 
diminution  during  that  period,  but  actually  increased. 

He  also  gives  tables  which  show  the  size  and  the  number 
of  the  holdings  of  agricultural  land  throughout  the  German 
Empire,  from  which  it  appears  that  45  per  cent,  of  the 
cultivated  land  is  in  holdings  of  20  hectares  or  less, 
and  that  if  the  moderate  sized  holdings — those  of  from 
20  to  100  hectares — are  included,  these  two  classes  account 
for  nearly  two-thirds  (65-78  per  cent.)  of  the  whole  culti- 
vated area  ;  so  that  only  one-third  of  the  land  is  in  large 
estates. 

In  Germany,  Bernstein  remarks,  the  holdings  which 
show  the  largest  increase,  whether  in  number  or  size,  are 
the  "  medium-sized "  holdings  of  from  5  to  20  hectares ; 
although  the  term  "  medium "  appears  somewhat  exag- 
gerated when  applied  to  such  small  areas.  The  next 
largest  increase  is  in  holdings  of  from  2  to  5  hectares ;  the 
smallest  holdings — of  less  than  2  hectares — increase  in 
number,  but  not  in  extent  of  total  area ;  the  other  classes 
of  holdings  remain  stationary  in  number  and  in  total  area,  if 
indeed  they  do  not  decrease.  If,  in  place  of  the  whole  of 
Germany,  Prussia  alone  is  considered,  the  result  would 
be  similar,  but  the  proportion  of  small  holdings  is  larger. 
Nearly  three-quarters  of  the  whole  area  under  cultivation 
in  that  country  is  in  small  (peasants')  holdings. 

The  conclusion  arrived  at  by  Bernstein,  with  respect 
to  the  assertion  that  the  concentration  of  all  industries  is 
rapidly  increasing,  was  as  follows : — "  If  the  downfall  of 
modern  society  depends  upon  the  disappearance  of  the 
intermediate  grades  between  the  apex  and  the  base  of 
the  social  pyramid,  if  this  downfall  assumes  as  a  necessary 
condition  the  absorption  of  these  grades  by  the  extremities 

R 


258  FALSITY  OF  MARX'  PROPHECY 

above  and  beneath  them,  then  its  realisation  in  England, 
in  Germany,  and  in  France,  is  no  nearer  now  than  at  any 
period  anterior  to  the  nineteenth  century."  ^ 

This,  then,  is  the  opinion  of  this  socialist  author,  who, 
although  nourished  upon  the  doctrines  of  Marx  and 
Engels,  thought  it  advisable  to  check  them  by  a  careful 
study  of  facts. 

*  Bernstein,  op.  cit^  p.  114. 


CHAPTER   II 

Concentration  of  industry.  Census  of  1896.  Survival  of  small 
industries.  Marx'  theory  of  industrial  and  commercial  crises. 
Bernstein  and  his  critics.  Chaotic  period  of  industrial  organisa- 
tions. Sources  from  which  Marx  obtained  information.  Social- 
istne  et  Science.  Criticism  of  "scientific  socialism."  Jaures 
and  Etudes  Socialistes.  Millerand  and  the  Socialisme  Rdformiste. 
Destruction  of  theoretical  socialism. 

In  addition  to  the  information  furnished  by  Bernstein 
and  to  that  given  earlier  in  this  book,  some  more  recent 
facts  relating  to  the  evolution  of  industrial  enterprise  in 
France  may  be  given  here. 

From  the  data  provided  by  the  census  of  1896,  the 
detailed  statistical  abstract  of  which,  together  with  the 
official  commentaries  upon  it,  did  not  appear  until  1901, 
it  appears  that,  of  the  present  population  of  France, 
18,712,689,  out  of  a  total  of  38,269,011,  are  classified  as 
professional  or  active.^  The  difference  between  these 
totals  is  made  up  of  the  aged  women  and  children  and 
those  who  follow  no  profession  or  trade.  From  the 
18,712,689  classed  as  professional  or  active,  the  following 
deductions  should  be  made  : — 550,000  persons,  comprising 
"  the  army  and  the  religious  bodies,  population  separately 
enumerated ; "  ^  967,900  persons  in  the  liberal  professions 
and  the  general  service  of  the  state ;  and  899,772  domestics, 
employees  of  proprietors   and  "  rentiers ; "  after  making 

*  Resultats  statistiques  du  recensement  des  industries  et  des 
professions,  vol.  iv.,  p.  15. 

"^  This  simple  grouping  of  the  army  and  the  religious  bodies 
is  the  official  classification  as  noted  in  the  text. 

259 


260 


CENSUS  OF  1896 


these  deductions  there  will  remain  16,295,017  individuals 
actively  employed  in  agriculture,  forestry,  fishing,  industry, 
and  commerce. 

We  come  now  to  that  part  of  the  official  statement 
which  relates  to  the  size  of  establishments.  The  statement 
is  as  follows  :  ^ — "  In  this  analysis,"  says  the  official  docu- 
ment, "we  take  account  only  of  establishments  with  at 
least  one  employee  or  workman."  "  We  will  first  consider 
three  great  classes :  the  first,  agriculture  and  forestry 
(section  2) ;  the  second,  industry,  properly  so  -  called 
(sections  3  and  4  and  group  9  B) ;  the  third,  commerce, 
including  bathing  establishments,  hair  -  dressing,  etc. 
(section  6  and  group  8  A)." 

In  these  three  classes,  the  average  number  of  wage 
earners  in  the  establishments  referred  to,  are  as  follows : — 


Employees 

and 
Workmen. 

Establishments 

with  at  least  one 

Employee  or 

Workman. 

Mean  Number 

of 
Wage  Earners 

Agriculture    . 

Industry 

Commerce 

3,259,625 

3,786,475 

657,475 

1,489,575 
582,592 
249,580 

2-1 
6-5 
2-6 

7,703,575 

... 

"  These  numbers  furnish  a  first  indication  of  the  size 
of  establishments,  which  is  greater  in  industry  than  in 
commerce  and  agriculture." 

The  fact  that  appears  most  clearly  from  these  official 
figures,  is  the  immense  extent  of  subdivision,  not  only 
in  agricultural  and  commercial,  but  also  in  industrial 
undertakings  in  France,  at  the  close  of  the  nineteenth 
century ;  they  show  also  how  widely  the  reality  differs 
from  the  predictions  indulged  in,  not  only  by  Marx  and 
the  collectivists  generally,  but  also  by  economists  who 
neglect  to  obtain  accurate  information. 

At  first  sight  it  is  difficult  to  understand  how  it  is  that 
labour  should   be   so   much  subdivided  at  a  time  when 

*  Resultats  statistiques^  etc.,  vol.  iv.,  "  Resultats  generaux,"  p.  70. 


SMALL  TRADES  261 

economy  of  effort,  good  organisation,  and  the  efficient  use 
of  powerful  machinery,  would  appear  to  require  the  collec- 
tion of  labour  in  vast  factories,  and  it  will  be  of  interest  to 
consider  how  this  situation,  which  seems  contradictory  and 
illogical,  has  been  created  and  is  maintained. 

In  the  first  place,  the  benefit  arising  from  production 
upon  a  great  scale  is  not  sufficient  to  counterbalance,  still 
less  to  surpass,  the  social  advantages  possessed  by  the 
smaller  traders  in  all  that  concerns  receipt  of  orders  and 
the  maintenance  of  a  good  understanding  between  pro- 
ducers and  consumers.  Proximity  and  friendly  relations 
often  cause  a  preference  to  be  shown  to  small  traders,  even 
if  the  net  cost  of  their  goods  is  somewhat  higher. 

In  the  second  place,  many  operations — for  instance, 
baking  and  laundry  work,  etc. — are  no  longer  carried  on  in 
private  houses,  as  they  were  during  the  eighteenth  century  ; 
these  requirements  are  now  supplied  by  small  industries 
and  special  trades.  This  evolution,  which  has  converted  so 
many  domestic  operations  into  small  independent  trades, 
is  a  fact  of  great  importance,  although  it  has  received  but 
little  notice.  From  the  commercial  point  of  view,  every 
small  or  medium  producer  is  anxious  to  dispose  of  his 
produce  himself;  and  whereas  formerly  he  lost  much  time 
in  correspondence  and  travelling  to  fairs  and  markets,  he 
now  sells  his  produce  to  travellers,  who  themselves  form  a 
new  class  of  traders,  and  who  scour  the  country,  and  buy 
commodities  where  they  are  produced.  This  change  has 
greatly  encouraged  the  increase  in  number  of  certain 
kinds  of  small  industries.  Thirdly,  the  inventions  of  the 
latter  half  of  the  nineteenth  century  have  been  favourable 
to  the  establishment  of  small  or  medium  industries,  and 
quite  a  crop  of  new  industries  have  sprung  up.  Again, 
some  of  the  new  industries  have  in  their  turn  given  rise  to 
others ;  thus,  the  bicycle  and  the  automobile,  and  the 
consequent  increase  of  tourists,  have  re-established  the 
country  inns.  In  Le  Travail des  Femmes  au  XIX"^  Siecle} 
a  number  of  facts  are  given  which  tend  to  show  that 
these  new  means  of  locomotion,  so  far  from  being 
'  By  P.  Leroy  Beaulieu,  pp.  444  et  seq. 


262         MORE  ELABORATE  COMMODITIES 

antagonistic  to  family  life,  as  might  be  imagined,  may 
even  assist  in  restoring  it. 

Without  supposing  that  there  will  be  a  cessation  of  the 
tendency  to  concentration  of  industry  in  those  manufactures 
which  necessitate  a  large  plant  and  a  highly  organised 
and  minute  division  of  work,  there  is  abundant  evidence 
to  show  that  a  vast  field  of  operation  remains  open  to  the 
smaller  industries.^ 

Fourthly,  as  people  grow  richer  and  more  refined,  they 
demand  novel  and  more  elaborate  commodities,  the  pro- 
duction of  which  is  well  suited  to  small  traders,  such  as 
florists,  carriage  builders,  art  metal  workers,  etc.  There 
are  also  some  wants  common  to  all  and  which  can  most 
conveniently  be  supplied  locally ;  all  small  towns  now 
possess  printing  works,  libraries,  and  paper  mills. 

Fifthly,  large  factories  are  often  themselves  the  creators 
of  small  auxiliary  industries.  Thus  engines  require  keeping 
in  order  and  repair — work  which  cannot  be  undertaken  by 
the  great  engine  manufacturers  themselves — and  conse- 
quently small  establishments  spring  up  locally  to  supply 
the  want ;  they  are,  as  it  were,  satellites  of  the  great 
manufacturers,  but  remain  independent  of  them. 

We  see,  then,  that  it  is  not  all,  but  only  some,  industries 
which  tend  to  become  concentrated  ;  it  is  upon  the  latter 
that  the  attention  of  socialists  is  fixed,  and  they  remain 
blind  to  the  fact  of  the  continuous  multiplication  of  new 
industries  which  require  only  small  or  moderate  establish- 
ments. 

Although  it  would  be  rash  to  prophesy  as  to  the  future, 
there  is,  at  any  rate,  no  present  indication  of  the  disap- 
pearance of  the  smaller  industries.  The  scale  upon  which 
any  special  manufacture  is  organised,  must  depend  upon 
the  nature  of  the  technique  necessary,  which  is  subject  to 
constant  change  and  modification.  It  is  not  likely  that 
certain  branches  of  production — such,  for  instance,  as  rails, 
locomotives,  iron  bridges,  or  cotton  spinning — will  ever 
cease  to  be  organised  upon  a  great  scale  ;  but  on  the  other 

^  See  La  petite  Industrie  contemporaine^  by  Brants,  Professeur  k 
I'Universit^  de  Louvain  :  Lecoffre,  1901. 


THEORETICAL  ERRORS  263 

hand,  some  branches  of  industry  which  seemed  to  belong 
definitely  to  the  class  of  large  undertakings,  are  now  found 
to  be  largely  carried  on  by  small  or  moderate  establish- 
ments, as  in  the  case  of  the  transport  industry,  owing  to 
the  development  of  cycling  and  automobilism.  Sugar 
refineries  also,  for  the  establishment  of  which,  a  very 
large  capital  used  to  be  considered  necessary,  and  which 
were  in  consequence  few  in  number,  are  now  established 
upon  a  moderate  scale,  and  whilst  the  number  of  the  great 
refineries  has  remained  the  same,  that  of  the  smaller  ones 
has  increased.^ 

When  dealing  with  matters  so  complex  as  those 
relating  to  economics  and  social  questions,  it  is  wise  to 
beware  of  generalisations.  It  is  from  neglect  to  observe 
this  precaution,  that  Malthus,  at  any  rate  so  far  as  his 
theory  applies  to  highly  civilised  nations,  fell  into  error, 
as  also  did  Ricardo,  with  his  "law  of  rent,"  and  the 
consequences  he  or  his  disciples  attributed  to  it ;  it  is 
this  also  that  explains  how  it  is  that  economists  with 
socialistic  proclivities,  and  socialists  from  Sismondi  down 
to  Marx  and  his  pupils,  have  deceived  themselves  into 
believing  that  production  would  be  wholly  or  almost 
wholly  monopolised  by  huge  industrial  establishments. 

Another  important  point  of  Marx'  doctrine,  is  his 
theory  of  industrial  and  commercial  crises,  which  he 
connects  with  the  concentration  of  production.  "  The 
final  cause,"  he  writes  in  the  third  volume  of  Das  Kapital^ 
"of  all  economic  crises,  is  always  poverty  and  the  restricted 
consumption  of  the  masses,  in  presence  of  the  tendency 
of  capitalistic  production  to  develop  productive  power  as 
if  the  capacity  of  social  consumption  were  unlimited." 
Bernstein  remarks  that  this  theory  hardly  differs  at  all 
from  that  of  Robertus,  and  asks  himself  "  if  the  enormous 
territorial  extension  of  international  markets,  taken  in 
conjunction  with  the  extraordinary  reduction  of  time 
necessary  for  communication  and  transport,  has  not 
increased  the  possibility  of  compensating  for  economical 
disturbances  to  so  great  an  extent,  and  if  the  immense 
^  See  L' ^conomiste,  12th  October  1901. 


264  "TRUSTS"  AND  ECONOMICAL  CONDITIONS 

increase  of  the  wealth  of  the  industrial  nations  of  Europe, 
together  with  the  elasticity  of  modern  credit,  and  the 
institution  of  industrial  trusts,  has  not  at  the  same  time  so 
materially  diminished  the  retroactive  force  of  local  and 
special  disturbances,  that  for  a  considerable  period  general 
commercial  crises,  on  the  same  scale  as  formerly,  have 
become  improbable,"  He  adds  that,  "speculation  is 
conditioned  by  the  relation  between  knowable  and 
unknowable  circumstances.  The  more  the  latter  prevail, 
the  more  speculation  will  flourish ;  the  more  the  contrary 
is  the  case,  the  less  scope  will  there  be  for  it.  This  is  the 
reason  why  excessive  extravagance  of  commercial  specula- 
tion coincides  with  the  commencement  of  a  capitalistic  era, 
and  why  speculation  usually  indulges  in  its  barbarous 
orgies  in  those  countries  in  which  capitalistic  development 
is  of  recent  origin.  In  the  domain  of  industry,  speculation 
flourishes,  specially  in  those  branches  of  production  which 
are  new.  The  longer  any  branch  of  production — with  the 
exception  of  the  making  of  articles  of  fashion  properly  so 
called — has  been  established  in  modern  industry,  the  more 
completely  speculation  ceases  to  take  the  leading  rdle. 
The  conditions  and  movements  of  the  market  are  more 
easily  controlled  and  more  accurately  noted." 

Bernstein,  after  referring  with  approval  to  the  effect 
of  "cartels,"  trusts,  and  syndicates,  or  associations  of 
adventurers — entrepreneurs — which  in  his  opinion  tend 
rather  to  regulate  than  to  disturb  economical  conditions, 
concludes  thus :  "  Periodical  and  partial  depression  in 
trade  is  unavoidable,  but  the  general  arrest  of  commerce 
in  view  of  the  organisation  and  extension  of  international 
markets,  and  especially  of  the  enormous  increase  of  pro- 
duction of  the  necessities  of  life^  is  not.  This  last  is  a 
factor  of  the  greatest  importance  in  our  problem. 
Nothing,  perhaps,  has  so  greatly  contributed  to  modify 
economic  crises  or  to  hinder  their  development  as  the 
lowering  of  rent,  and  of  the  price  of  necessary  provisions."  ^ 
Bernstein's   forecast,  therefore,  of  the  future   of  civilised 

*  Bernstein,  op.  cit.,  pp.  123,  128,  133,  136,  143,  and  144.     The 
words  italicised  are  so  in  the  text 


"  SCIENTIFIC  SOCIALISM  '^  265 

nations  under  the  much-abused  economic  system  which 
socialists  term  "capitalistic"  is  reassuring,  and  Marx' 
theory,  that  economic  crises  would  entail  the  castastrophic 
destruction  of  capitalistic  society,  stands  condemned.  It 
is  to  be  noted  that  the  most  serious  and  intense  economic 
crises  occur  in  primitive  countries,  or  in  societies  in  which, 
to  use  the  socialists'  jargon,  "  industry  is  non-capitalistic  " 
— for  example,  the  periodic  famines  in  India  or  Russia,  or 
the  crisis  which  now  (end  of  1902)  so  grievously  afflicts 
the  coast  population  of  Finisterre,  in  consequence  of  the 
disappearance  of  the  sardine,  which  provides  their  chief 
industry,  from  its  usual  haunts. 

Bernstein,  the  disciple  of  Marx  and  Engels,  and  the 
intellectual  legatee  of  the  latter,  having  demolished  the 
frail  scaffolding  of  sophisms  which  constituted  their 
pretentious  doctrine,  was  attacked  by  the  more  violent 
collectivists  as  an  apostate.  "  It  is  because  I  do  not 
represent  the  position  of  the  workman  as  being  hopeless, 
because  I  recognise  the  possibility  of  ameliorating  it,  as 
well  as  many  other  facts  already  affirmed  by  '  bourgeois ' 
economists,  that  M.  Plekhanow  includes  me  in  the  ranks 
of  the  opponents  of  '  scientific  socialism.'  '  Scientific ! '  if 
ever  the  word  '  science '  is  pure  *  cant,'  it  is  when  thus 
used.  The  phrase  describing  the  condition  of  the  working 
man  as  being  hopeless,  was  written  more  than  fifty  years 
since.  One  meets  it  in  all  the  radical  socialist  literature 
from  1830  to  1850,  and  many  of  the  statements  made 
appear  to  justify  it.  Thus,  it  is  comprehensible  that 
Marx,  in  La  Misere  de  la  Philosophie,  should  assert  that 
the  workman's  minimum  cost  of  living  constituted  his 
natural  salary ;  that  the  authors  of  the  Communist 
Manifesto  should  declare  categorically  that  the  '  condition  of 
the  modern  workman,  in  place  of  rising  with  the  progress 
of  industry,  falls  continually  lower  ;  [that]  the  workman  be- 
comes a  pauper,  and  pauperism  develops  even  more 
rapidly  than  population  and  wealth ; '  and  that  one  should 
read  in  the  Luttes  de  Classes  that  the  smallest  improve- 
ment in  the  condition  of  the  workmen  'will  always 
appear    to   be   a   "  Utopia "   in   the   eyes   of  a  bourgeois 


266  CHAOTIC  PERIOD  OF  INDUSTRY 

republic'  The  hopelessness  of  the  workman's  position 
is,  therefore,  an  unalterable  axiom  of  scientific  socialism. 
Whilst  to  recognise  facts  which  contradict  these  assertions, 
is,  according  to  M.  Plekhanow,  to  follow  the  track  of  the 
*  bourgeois '  economists  who  have  affirmed  these  facts."  ^ 

Admitting  that  complaints  of  the  evil  effects  of  the 
concentration  of  industry  at  the  beginning  of  the  nine- 
teenth century  were  well  founded,  it  has  been  shown  in 
the  Essai  sur  la  repartition  des  richesses,  that  the  trouble 
was  caused  by  the  abrupt  way  in  which  the  change  was 
introduced  and  the  rapidity  with  which  it  spread,  and 
that  many  of  the  unfavourable  conditions  thus  brought 
about  soon  improved  and  disappeared.  A  phrase  made 
use  of  in  that  book,  which  has  been  accepted  as  correctly 
describing  this  epoch,  is — "  the  chaotic  period  of  industry 
organised  upon  a  large  scale."  ^ 

By  slow  degrees  this  chaos  has  become  organised,  but 
the  era  of  organisation  is  not  yet,  and  never  will  be,  quite 
completed,  because  a  free  industrial  system  possesses  an 
inherent  and  inexhaustible  capacity  for  improvement. 
It  was  under  a  vivid  impression  of  the  evils  caused  by  the 
industrial  chaos  referred  to  that  Marx  wrote :  indeed,  the 
sources  from  which  he  obtained  his  information  for  his 
works,  especially  for  Das  Kapital,  were  chiefly  enquiries 
bearing  upon  the  events  of  this  period.  Engels,  in  his 
preface  to  the  third  volume  (posthumous)  of  Das  Kapital^ 
gives  a  list  of  the  documents  which  provided  Marx  with 
materials.  "  He  has  not,"  says  Engels,  "  made  use,  to  any 
considerable  extent,  of  other  than  the  four  following 
parliamentary  reports : — 

"i.  Reports  from  Committee  (House  of  Commons),  vol.  viii.  Com- 
mercial Distress,  vol.  ii.,  part  i.,  1847-48.  "  Minutes  of  evidence," 
referred  to  under  the  title.  Commercial  Distress,  1847-48. 

"2.  Secret  Comm.ittee  of  the  House  of  Lords  on  Commercial  Distress^ 
1847.       Report    printed    1848,    evidence    printed    1857    (the 

*  Bernstein,  op.  cit.,  pp.  280-81. 

2  Essai  sur  la  repartition  des  richesses,  P.  Leroy  BeauHeu,  chaps, 
xiv.,  XV.,  xvi.,  and  xvii. 


MARX'  SOURCES  OF  INFORMATION        267 

evidence  printed  was  considered  too  compromising  for  pro- 
duction in  1848),  CZ?.,  1848-57. 
"3.  Report:  Bank  Acts,  iS $7^  and  Report :  Bank  Acts,  1858.  These 
two  publications  are  the  Reports  of  the  Committee  of  the 
House  of  Commons  upon  the  working  of  the  Bank  Acts  of 
1844  and  1845,  together  with  the  evidence  given  at  the 
enquiry.  They  are  designated  C.B.  (sometimes  C.A.)  1857 
or  1858." 

We  see  that  all  these  documents  relate  to  the  chaotic 
period  of  great  industries,  zxiA^dX  the  two  first  and  most 
important  reports  belong  to  a  year  memorable  for  the 
effects  of  severe  famine  and  for  a  revolution.  A  narrower 
field  for  observation  would  be  difficult  to  find,  and  the 
restricted  and  abnormal  character  of  his  information  is 
alone  sufficient  to  deprive  Marx'  criticisms  of  existing 
society  of  the  greater  part  of  their  value. 

Kautsky,  the  true  exponent  of  pure  Marxism,  is 
obliged  to  admit  that  during  the  first  part  of  the  nineteenth 
century,  the  British  wage-earning  classes  were  in  an 
abnormally  distressed  condition,  and  by  this  admission,  he 
unwittingly  destroyed  the  value  of  Marx'  observations 
upon  the  facts  relating  to  that  epoch.  He  writes  :  "  The 
period  from  1812-47  has  been  the  worst  for  the  wage- 
earning  population  of  England.  This  is  the  era  from 
which  Engels  has  borrowed  his  description  of  the  '  condition 
of  the  wage-earning  classes ' — the  time  when  the  proletariat 
fell  into  pauperism  and  crime,  and  when  its  physical  and 
moral  degeneration  was  arrested  neither  by  laws  favour- 
able to  wage  earners,  nor  by  energetic  trades-union 
agitation."^  But  these  evils  were  not  attributable  only 
to  the  want  of  protective  legislation  for  the  wage  earners, 
or  to  the  non-existence  of  trades-union  agitation ;  they 
were  chiefly  due  to  the  concentration  of  industry,  conse- 
quent upon  the  introduction  of  machinery,  and  especially  to 
the  abruptness  with  which  the  new  conditions  were  intro- 
duced. The  immediate  effect  was  to  increase  the  wealth 
of  the  wealthy  classes,  to  diminish  the  cost  of  commodities, 
and,  at  the  same  time,  to  cause  a  profound  disturbance  of 

^  Le  Marxisme  et  son  critique,  Bernstein,  p.  184. 


268       BERNSTEIN  ACCUSED  OF  APOSTASY 

the  labour  market.  The  uprooting  of  entire  populations, 
and  the  consequent  radical  alteration  of  habits,  could  not 
fail  to  cause  great  troubles ;  happily,  however,  they  were 
only  transitory.  We  see,  therefore,  that  descriptions  of 
this  epoch,  not  only  those  given  by  Marx  and  Proudhon, 
but  also  by  L^on  Faucher  or  the  elder  Blanqui,  as  well 
as,  to  some  extent,  by  Stuart  Mill,  relate  to  a  state  of 
things  which  has  now  disappeared,  leaving  hardly  a  trace, 
and  thus  have  little  or  no  bearing  upon  existing  industrial 
conditions. 

Whilst  the  more  violent  collectivists  accuse  Bernstein  of 
apostasy,  the  chiefs  of  the  party  deal  more  gently  with  him, 
and,  although  they  oppose  him,  they  appear  to  consider 
that  he  has  not  repudiated  his  connection  with  their  party, 
in  which  he  still  retains  many  adherents.  It  is  no  less  true, 
however,  that  he  has  given  the  coup  de  grace  to  Marxism. 
Kautsky  himself,  referring  to  his  well-established  assertion, 
"that  the  number  of  owners  has  for  a  long  time  been 
increasing  in  place  of  decreasing,"  sadly  remarked  to  him  at 
the  Stuttgard  congress,  that "  if  this  is  true,  the  hour  of  our 
victory  will  not  only  be  very  far  distant,  but  we  shall 
never  attain  our  end.  If  it  is  the  number  of  *  the  haves ' 
that  is  increasing,  and  not  the  number  of  the  *  have  nots,' 
we  shall  always  be  travelling  further  from  our  object  in 
proportion  to  the  rate  of  social  improvement,  and  it  would 
be  socialism,  and  not  capitalism,  which  would  be  abolishing 
itself"  1 

Except  that  capitalism  is  not,  any  more  than 
individualism,  the  antithesis  of  socialism,  this  apos- 
trophe of  Kautsky's  verges  on  the  truth ;  impartial  and 
accurate  observers  see  that,  in  spite  of  arbitrary  laws, 
imposed  by  passion  or  ignorance,  and  of  the  fact  that  the 
happiness  and  prosperity  of  the  human  race  is  not  con- 
sciously its  object,  it  is  liberalism  and  not  socialism  that 
is  establishing  itself.  The  doctrine  which  is  the  true 
antithesis  to  socialism,  is  neither  individualism  nor 
capitalism,  but  liberalism. 

The  first  portion  of  Bernstein's  book  deserves  attention, 
*  Bernstein,  op.  cit.,  p.  289. 


MUNICIPAL  SOCIALISM  269 

not  so  much  on  account  of  its  originality,  but  because  of 
the  sensation  it  produced,  and  the  consequences  which 
followed  upon  its  appearance.  The  second  part,  which  is 
more  commonplace,  and  which  has  been  almost  entirely 
neglected  by  his  adversaries — e.g.y  Kautsky — refers  to  "  the 
mission  of  social  democracy,  and  its  means  for  fulfilling 
it."  Renouncing  any  attempt  to  overthrow  the  existing 
social  system,  Bernstein  bases  his  hopes  upon  the  develop- 
ment of  working  men's  associations,  co-operative  societies, 
and  similar  organisations,  for  the  formation  of  which 
compulsion  is  not  necessary  ;  he  also  strongly  recommends 
what  is  known  as  municipal  socialism — proposals  which  are 
opportunist,  and  which  differ  essentially  from  the  collectiv- 
ism of  Marx. 

In  1903  Bernstein  published  a  small  book,^  in  which 
he  openly  denied  the  scientific  character  claimed  for  Marx' 
doctrine.  The  assertion  that  the  theory  of  plus-value 
has  made  a  science  of  socialism,  he  declares,  has  been  over- 
thrown.2  He  also  finds  fault  with  Engels  and  Marx  for 
founding  their  appeal  on  behalf  of  communism  "upon 
the  certain  bankruptcy  of  the  capitalistic  system  of 
production,  which  every  day  becomes  more  visible,"  ^  and 
shows  that,  on  the  contrary,  it  is  the  various  formulas 
successively  adopted  by  socialists,  that  are  really  in  a  state 
of  bankruptcy.  He  says  :  *'  The  point  now  is  to  discover 
whether  the  end  (of  the  method  of  capitalistic  production) 
will  be  catastrophic,  whether  this  catastrophe  is  to  be 
expected  in  the  near  future,  and  whether  it  would  neces- 
sarily lead  to  socialism.  To  this  question,  or  rather,  these 
questions,  the  socialists  have  given  very  divergent  answers. 
I  will  confine  myself  to  recalling  the  fate  of  the  *  iron  law 
of  wages,'  the  formula  made  use  of  by  Lassalle  to  rouse 
the  masses.  Rarely  has  any  economic  doctrine  been 
accepted  with  such  firm  and  deep  conviction.  For  a 
long  time  it  was  the  mot  d'ordre  in  working-class 
movements,  a  symbol  which  would  renew  the  strength 
of  the   most    devoted    and  valiant    combatants.     Never- 

1  Socialisme  et  Science,  Bernstein :  Giard  et  Bri^re,  Paris,  1903, 
2  Ibid.y  p.  21.  ^  J  bid.,  p.  23. 


270  THE  COMMUNIST  MANIFESTO 

theless,  the  time  came  when,  with  almost  brutal  pre- 
cision, it  was  established  that  this  *  law '  was  not  a  '  law,' 
that  it  had  no  scientific  basis,  and  that  it  must  dis- 
appear from  our  programme ;  then,  if  I  am  correctly 
informed,  it  was  not  without  grievous  internal  dissensions 
that  many  of  the  combatants  resigned  themselves  to 
accept  the  new  doctrine ;  it  was  nevertheless  unavoidable. 
At  the  present  day  this  '  law '  no  longer  counts  ;  no  one 
speaks  of  it,  which  to  my  mind  is  going  too  far.  Allow 
me  to  recall  to  you  this  other  idea,  according  to  which 
the  economic  condition  of  wage  earners  would  necessarily 
grow  worse,  and  would  become  more  and  more  intolerable, 
in  proportion  to  the  development  of  capitalism — a  theory 
known  as  'the  theory  of  pauperisation'  (verelendungs- 
theorie).  For  a  time  it  had  much  notoriety  :  it  appeared 
to  rest  upon  a  solid  scientific  basis,  it  inspired  many 
passages  of  the  Communist  Manifesto ;  it  is  still  to  be 
found  in  the  numerous  publications  of  the  last  generation 
of  socialists ;  but  to-day  that  theory  is  abandoned,  I  might 
also  refer  to  the  idea  of  the  parallelism  between  industrial 
and  agricultural  evolution,  the  theory  of  the  progressive 
diminution  in  the  number  of  capitalists,  the  idea  that 
under  the  influence  of  machinery,  work  of  all  kinds  would 
be  equalised — a  whole  series  of  theories  which  passed  as 
having  been  scientifically  established,  and  that  have  now 
been  recognised  as  being  false,  or  rather,  to  avoid  all 
exaggeration,  as  being  only  partly  true."  ^ 

Once  more  Bernstein  asks  himself  whether  "  any  real 
connection  between  socialism  and  science  exists,  if 
scientific  socialism  is  possible — and,  as  a  socialist,  I  add,  or 
necessary"  After  a  searching  analysis, he  concludes  that  it 
is  not.  "When  socialism  is  spoken  of  as  scientific,  it 
is  merely  an  attempt  to  justify  the  aspirations  and  claims 
of  socialism,  and  the  theory  on  which  they  are  founded. 
The  socialistic  movement,  as  a  collectivist  manifestation, 
is  thus,  in  truth,  the  object  of  study  of  this  theory,  which 
seeks  to  understand  and  to  explain  it  (?>.,  the  socialist 
movement),  to  furnish  it  with  weapons,  and  reveal  it  to 
'  Socialisme  et  Science^  pp.  24-26. 


AN  ERROR  OF  REASONING  271 

itself ;  but  this  agitation  is  clearly  no  more  '  scientific '  than 
the  insurrection  of  the  German  peasants,  the  French 
Revolution,  or  any  other  historic  conflict.  Socialism  as  a 
science  appeals  to  our  desire  to  know:  socialism  as  a 
moving  force  appeals  to  interest.  .  .  .  Between  science 
which  represents  our  desire  for  knowledge,  and  a  political 
or  economic  interest  of  any  kind,  there  may  always  be 
antagonism."^  Again,  "it  is  obvious  that,  thus  defined, 
socialism  is  not  only  a  purely  scientific  movement.  Class 
warfare  is  a  war  of  interests ;  .  .  .  the  question  here  is 
always  of  a  contest,  the  essential  aim  of  which  is  to  advance 
the  interests  of  a  class  or  of  a  party ;  there  is  no  scientific 
question,  except  in  so  far  as  science  is  in  accordance  with 
those  interests."  The  whole  of  this  argument,  of  which 
only  the  principal  features  can  be  given  here,  should  be 
read.  "  As  a  doctrine,  socialism  is  the  theory  of  this  strife 
(class  warfare).  As  a  movement,  it  has  a  definite  aim : 
— the  transformation  of  a  society  organised  upon  a  capital- 
istic system,  into  a  society  regulated  upon  collectivist 
principles.  This  end,  nevertheless,  is  not  a  theoretical 
prophecy  the  more  or  less  certain  accomplishment  of  which 
may  be  awaited.  It  is,  to  a  certain  extent,  a  fin  voulue — a 
desired  end,  the  realisation  of  which  must  be  fought  for."  ^ 

To  confuse  movement  towards  an  end  desired  in  the 
interest  of  a  class  with  science,  is  surely  as  great  an  error 
of  reasoning  as  it  is  possible  to  imagine ;  Bernstein  returns 
again  and  again  to  this  most  important  point.  "  The  only 
question  which  demands  a  reply,  is  to  know  whether  and 
to  what  extent  the  fact  that  socialism  as  a  political  question 
will  allow  of  that  freedom  to  theorize  which  is  a  primary 
condition  of  true  science."  Whether  he  regards  socialism 
as  being  a  movement  towards  a  definite  goal  or  as  a 
theory,  two  quite  different  points  of  view,  he  cannot  find 
anything  scientific  about  it.  Its  doctrines  are  "sub- 
ordinated  to   determinate   aims,  which   do   not  implicate 

'  Bernstein,  in  making  use  of  the  word  "  interest,"  remarks  that  it 
may  include  moral  or  ideal,  as  well  as  material  or  personal  interests, 
but  that  this  in  no  way  affects  the  argument. 

^  Socialisine  et  Scieme^  pp.  31-32. 


272  SCHISMS  AMONGST  SOCIALISTS 

knowledge,  but  desire ;  "  and  as  to  the  theory  itself,  it  is 
permeated  with  the  idea  of  a  hypothetical  realisation  of 
future  society,  and  is  responsive  to  aspirations  rather  than 
to  observation  of  facts.  "  Socialism  is  not,  and  cannot  be, 
exclusively  a  science,  a  pure  science.  Its  very  name  is 
evidence  of  this :  sciences  do  not  have  names  which  end  in 
'  ism  ' ;  names  which  end  thus  denote  aspirations,  systems 
of  thought  and  of  deductive  reasoning,  but  never  science. 
The  foundation  of  true  science  is  experience ;  for  basis  it 
has  accumulated  knowledge.  Socialism  is  the  theory  of  a 
future  social  system,  and  this  is  why  its  characteristics 
elude  all  scientific  demonstration."^  Thus,  Bernstein 
completes  his  destructive  criticism  of  the  Marxian  doctrine. 
"  Scientific  Socialism "  is  finally  destroyed,  and  the  idol 
before  which  two  generations  have  prostrated  themselves 
vanishes  and  leaves  no  trace. 

A  movement  somewhat  analogous  to  that  in  Germany 
took  place  in  France.  There  also  a  schism  arose  amongst 
socialists,  but  it  was  of  a  different  character,  and  was 
caused  far  more  by  questions  of  tactics  than  of  doctrines ; 
it  is  strange  that  the  collectivist  doctrine  has  not  been 
repudiated  by  the  self-styled  "moderate"  members  of 
the  socialist  party.  Between  Jules  Guesde,  the  faithful 
follower  of  Marx,  and  Jaures  and  Millerand  and  socialists 
who  are  considered  as  being  opportunists — that  is,  who  are 
prepared  to  compromise  {socialistes  transigeants) — there 
has  been  no  doctrinal  rupture  similar  to  that  between 
Bernstein  and  the  German  adherents  of  the  so-called 
scientific  socialism.  Jaures  and  Millerand,  as  politicians, 
are  satisfied  to  follow  an  opportunist  policy,  to  take  part  in 
public  functions,  and  to  endeavour  to  secure  the  control  of 
them  by  degrees.  When  necessary,  however,  they  con- 
tinue, especially  the  former,  to  declare  themselves  as  being 
collectivists.  Jaures,  indeed,  went  further,  and,  as  if  "col- 
lectivism" was  not  sufficient,  often  substituted  the 
term  "communism."  In  the  introduction  to  his  book, 
Etudes  socialistes^  under  the  sub-title  "  The  question  of 

*  Socialisme  et  Science,  pp.  42,  45,  and  47. 

*  £tudes  Socialisies,  Jaures ;  Paul  Ollendorf,  published  1902. 


JAUR^S  278 

method,"  Jaur^s,  referring  to  the  proletariat,  writes  :  "  For 
individual  and  capitalistic  property,  which  assures  the 
domination  of  one  set  of  men  by  another,  they  desire  to 
substitute  the  communism  of  production,  a  system  of 
universal  social  co-operation  in  which  every  man  as  of 
right  is  a  partner.  They  have  thus  separated  their  ideas 
from  the  *  bourgeois '  ideas ;  they  have  also  separated  their 
action  from  '  bourgeois '  action.  At  the  service  of  their 
communistic  ideal,  they  place  an  organisation  of  their  own, 
a  class  organisation,  the  growing  power  of  trade-unions, 
workmen's  co-operative  societies,  and  the  increasing  share 
of  political  power  they  have  conquered  or  secured  from  the 
state.  On  this  general  and  primary  idea  all  socialists  are 
agreed."  ^ 

Thus,  according  to  Jaur^s,  there  is  complete  agreement 
upon  the  general  idea  of  communism  of  production,  the 
communist  ideal,  the  only  difference  arising  upon  ques- 
tions of  method.  Some  socialists,  like  Guesde,  refuse  to 
allow  of  delay,  and  incline  to  revolution ;  others,  like 
Jaures,  would  allow  of  temporary  arrangements,  and 
would  proceed  by  the  method  of  progressive  absorp- 
tion of  the  powers  of  the  state.  Unlike  Bernstein, 
Jaures  in  no  way  renounces  collectivism  pure  and 
simple ;  he  goes  even  further,  since  he  adopts  communism, 
being  apparently  ignorant  of  the  distinction  which 
according  to  German  theorists  exists  between  these 
doctrines. 

Throughout  the  doctrinal  dissertations  in  his  book, 
the  word  "  communism "  is  used  and  emphasised  by 
Jaures.  He  thoroughly  recognises  that  the  revolutionary 
method  advocated  by  Marx,  in  whatever  sense  it  is 
understood,  is  superannuated.  "  The  two  hypotheses — 
one  historic,  the  other  economic — which,  according  to 
the  opinion  expressed  in  the  Communistic  Manifesto, 
ought  to  produce  an  immediate  proletariat  revolution, 
the  revolution  of  the  dictatorship  of  labour,  are  equally 
destroyed."  ^  But  these  reflections  are  in  reality  applicable 
only  to  methods  and  procedure  similar  to  those  advocated 
'  Jaures,  op.  cit,  p.  9.  ^  Ibid.,  p.  49,  50. 

S 


274  JAUR^S  AND  BERNSTEIN 

by  Marx,  and  it  appears  evident  from  all  his  explanations, 
although  they  are  sometimes  very  confused,  that  Jaur^s' 
ideal  is,  in  fact,  communism.  "  I  am  convinced  that,  in 
the  revolutionary  evolution  which  will  lead  us  to  com- 
munism, collectivist  property  and  individual  property 
(communism  and  capitalism)  will  for  long  continue  to 
exist  side  by  side.  This  is,  indeed,  the  law  of  great 
changes."  1  We  see  here  some  concession  as  to  time, 
but  none  as  to  the  aim,  and  the  words  communism 
{complete  communism^  and  communist  (communistic  system, 
communistic  ideal)  are  here  used  by  Jaures  as  if  they 
were  the  positive  formulas  of  a  programme,  or  the 
articles  of  faith  of  a  religion,^  He  declares  that  it 
would  be  a  serious  mistake  to  lose  sight  of  the  final 
aim  of  socialism  in  the  mists  of  the  future :  "  communism 
ought  to  be  the  manifest  and  directing  idea  of  the  whole 
movement ; "  ^  and  he  accuses  Bernstein  of  a  tendency  in 
this  direction.  In  reply  to  this  charge,  Bernstein  writes, 
after  remarking  that  Jaures  could  not,  in  making  this 
accusation,  have  had  before  him  the  preface  to  Socialisme 
th^orique  et  Sociale  Democratic  pratique,  "  or  he  would  have 
seen  that  I  do  not  in  any  way  deny  the  necessity  of  a 
guiding  aim ;  but  the  point  upon  which  I  freely  admit 
that  I  differ  from  Jaures,  is  this :  for  me,  communism  is 
rather  a  means  than  an  end.  To  my  mind,  it  is  for  the 
future  to  decide  as  to  the  form  which  communism  will 
assume,  and  as  to  the  extent  of  its  development  necessary, 
in  order  to  secure  the  greatest  possible  amount  of  material 
and  moral  well-being  at  each  period  of  history."  *  Thus, 
the  German,  a  far  more  profound  philosopher  than  the 
Frenchman,  sees  quite  clearly  that  his  convictions  differ 
from  those  of  Jaures,  although  Jaures  himself  has  aban- 
doned, on  more  than  one  point,  the  theories  of  Marx,  and 
has  recognised  the  falsity  of  his  prophecies.  Kautsky,  in 
Germany,  and  still  more,  Guesde  in  France,  are,  exclusive 
of  the  aged  Bebel,  almost  the  only  avowed  upholders  of 
unadulterated  Marxism  at  the  present  time. 

*  Jaures,  op.  cit.,  p.  24.  ^  Ibid.,  pp.  25,  51,  52,  53,  and  54. 

'  Ibid.,  p.  53.  *  Socialisme  et  Science,  p.  7. 


SUPPORTERS  OF  PURE  MARXISM  275 

In  France,  in  the  early  part  of  1903,  Millerand  took  a 
further  step  outside  the  collectivist  fold.  In  a  book 
published  under  the  title  of  Socialisme  Riformiste^  which 
is  a  reproduction  of  some  of  his  lectures,  he  separates 
himself  from  the  doctrines  of  Marx  and  his  disciples.  As 
a  practical  man,  he  treats  the  doctrinaire  ideals  of  the 
future  with  contempt.  "These  Utopias,"  he  says,  "are 
not  disadvantageous ;  they  may  even  be  useful,  if  it  is 
remembered  to  accept  them  for  what  they  really  are — 
works  of  the  imagination,  constantly  changing  under  the 
influence  of  reality ;  but  they  would  be  perilous  and  would 
expose  the  future  to  fatal  danger,  if  they  came  to  be 
considered  as  embodying  socialist  thought  and  action." 
Millerand's  description  of  his  programme  is  vague  and 
wanting  in  definition,  and  upon  the  subject  of  property, 
he  makes  use  of  a  phraseology  calculated  to  make  a 
solution  of  the  problem  impossible.  According  to  him, 
"socialism"  "desires  that  in  the  new  humanity,  not 
that  individual  property  should  be  suppressed,  which 
would  be  an  incomprehensible  proposal,  but  that  it  should 
be  transformed  and  enlarged,  so  that  it  should  offer  to 
every  man  a  natural  and  necessary  extension  of  his 
command  of  commodities,  a  right  which  is  indispensable 
for  life  and  development." 

This  confused  statement,  although  not  of  a  kind  to 
enlighten  the  mind  of  the  reader  or  to  assist  in  the  con- 
struction of  a  definite  social  system,  nevertheless  departs 
widely  from  the  ideas  of  Marx  and  of  collectivists  in 
general.  After  this  introduction,  Millerand  explains  the 
positive  side  of  his  so-called  Socialisme  Riformiste,  which, 
though  far  less  systematic  and  positive,  is  quite  as  dis- 
quieting as,  if  not  more  so  than,  the  scientific  socialism  of 
Marx  and  Engels. 

A  man  less  widely  known  than  Millerand — Sorel — who 
has  given  much  attention  to  social  questions,  and  who 
is  counted  amongst  the  most  thoughtful  and  learned 
members  of  the  contemporaneous  school  of  French 
socialists,  concludes  a  series  of  articles  on  Socialistic  ideas 
and  economic  facts  in  the  i()th  century,   published    in  the 


276  THE  REVUE  SOCIALISTE 

review  lately  founded  by  Benoit  Malon,  with  the  following 
words : — "  We  must  ask  ourselves,  what  is  the  law  of  the 
degeneration  and  renaissance  of  socialism,  and  what  are 
the  conditions  under  which  revolutionaries  can  preserve 
their  ideas  intact,  whilst  continuing  to  participate  in  the 
national  life.  We  must  ask  ourselves  whether  the  idea  of 
revolution  is  really  indispensable  to  Marxism,  in  what  lies 
its  true  signification,  and  compare  it  with  what  is  known 
as  evolution.  Finally,  we  must  ask  ourselves  whether 
Marxism  is  destined  to  be  merged  in  the  ideas  of  the  early 
socialists,  in  a  vast  synthesis,  or  whether  it  is  but  a  passing 
phase  of  development ;  or  again,  whether  socialism  itself 
is  not  merely  one  aspect  of  democracy.  It  is  always 
dangerous  to  attempt  the  role  of  prophet ;  to  deal  with 
these  questions,  it  would  be  frequently  necessary  to 
anticipate  the  future.  The  experience  which  is  now  being 
gained  in  almost  all  European  countries  will  soon  furnish 
ample  elements  for  an  objective  study  of  the  development 
of  socialism."  ^  This  is  well  and  wisely  said,  and  supports 
the  profound  observation  made  by  Bernstein :  "  Whilst 
in  the  field  of  action  socialism  has  made  considerable 
progress,  whilst  in  almost  every  country  socialists  advance 
from  one  success  to  another,  whilst  the  labour  movement 
daily  conquers  fresh  positions  and  approaches  with  greater 
certainty  the  end  it  desires,  and  socialism  formulates 
its  claims  with  greater  clearness,  it  appears  that,  in  the 
realms  of  science,  on  the  contrary,  theoretical  socialism 
is  tending,  not  to  unity,  but  to  dissolution,  and  that,  in  the 
minds  of  socialist  theorists,  certainty  has  been  replaced  by 
doubt  and  incoherence."  ^ 

Formidable  as  the  socialist  party  may  appear  to  be, 
and  important  as  may  be  the  positions  it  is  by  way  of 
securing,  it  is  useful  to  have  established  the  fact,  that  by 
the  admission  of  those  who  were  formerly  their  chief 
evangelists,  these  pretentious  theories  have  been  com- 
pletely destroyed  ;  instead  of  a  compact  doctrine,  nothing 
now  remains  but  vague,  although  dangerously  attractive 

*  Revue  Socialiste^  Ed.  by  Benoit  Malon,  May  1902,  p.  544. 

*  Socialisme  et  Science^  p.  26. 


THE"  SIREN  ^'  277 

aspirations ;  but  the  more  smiling  and  placid  the  counten- 
ance of  the  siren,  and  the  more  alluring  her  gestures, 
the  greater  is  the  danger  that  ingenuous  souls  and 
vacillating  minds  will  be  seduced  by  her  charms  and 
dragged  down  into  the  abyss. 


CHAPTER  III 

The  "  Parti  Socialiste  frangais,"  the  "  Parti  Ouvrier,"  and  the  "  Parti 
Socialiste  de  France."  Enquiry  into  political  differences  amongst 
socialists  by  George  Renard.  The  five  points  of  the  new  pro- 
gramme. Co-operative  associations :  (i)  for  production ;  (2)  for 
consumption.  Administration  of  industries  by  the  state  and  by 
municipalities. 

As  has  been  demonstrated  in  the  preceding  chapter,  the 
opening  years  of  the  twentieth  century  have  seen  the 
complete  destruction  of  scientific  socialism  or  Marxism ; 
but  the  downfall  of  these  theories  has  by  no  means 
discouraged  the  socialist  party.  New  forms  of  socialism 
have  arisen,  but  socialistic  aspirations  remain  unaltered, 
the  number  of  disciples,  adherents,  and  admirers,  united 
by  a  common  ideal,  has  become  larger  and  more  enthusi- 
astic ;  tactics  and  the  plan  of  attack  have  been  modified, 
but  the  menace  to  society  is  as  great  now  as  it  was  when 
Marxian  collectivism  was  the  dominating  influence — it  is, 
indeed,  even  greater  and  more  pressing. 

Bernstein  in  Germany,  and  Millerand  (formerly 
Minister  of  Commerce)  in  France,  have  introduced  the 
policy  of  a  slow  and  gradual  approach  to  collectivism, 
and  are  contented  with  small  successive  steps  towards 
the  goal,  but  they  have  by  no  means  abjured  collectivism 
itself  At  a  meeting  at  Vierzon,  in  March  1903,  Millerand 
recommended  political  action  of  the  kind  known  as 
opportunist,  and  pointed  out  that  socialist  tactics  in  a 
democratic  system  necessarily  differ  from  those  to  be 
adopted  under  a  monarchial  government.  The  socialist 
party,  he  declared,  must  take  its  share  of  responsibility 

278 


THE  "PARTI  SOCIALISTE  FRANgAIS"       279 

for  external  as  well  as  for  domestic  politics ;  and  he  asserted 
that  experience  has  proved  the  advantage  of  participation 
in  the  work  of  government.^ 

The  day  after  Millerand  advocated  these  tactics  at 
Vierzon  in  Berry,  Jaures  expounded  his  views  at  a  great 
public  meeting  at  Denain,  in  the  "  Departement  du  Nord." 
"  Socialism,"  he  said,  "  proposes  to  create  a  new  society : 
it  desires  the  disappearance  of  antagonism  between  the 
two  classes.  We  do  not  demand — (it  is  impossible) — that 
capitalistic  society  should  be  divided  in  pieces  so  that  each 
one  should  have  his  share.  We  demand  that  the  huge 
capitalist  property  should  belong  to  the  nation  in  common, 
who  would  entrust  the  use  of  it  to  workers  of  all  kinds — 
those  who  work  with  their  brains  equally  with  those  who 
work  with  their  hands.  In  this  conception,  socialists  of  all 
schools  and  of  all  classes  ought  to  find  common  ground." 
Jaures  states  the  three  great  categories  of  reforms  in  the 
socialist  programme  as  being — 

1.  Those  relating  to  the  safe-guarding  of  labour. 

2.  Those  relating  to  the  organisation  of  the  vast 
system  of  wage  earners'  insurance  against  accident,  sick- 
ness, old  age,  and  unemployment.  The  workman  cannot 
by  his  own  effort  accomplish  the  double  task  of  creating 
wealth  for  another  and  of  insuring  his  own  future. 

3.  Those  which  have  for  object  the  transformation  of 
great  capitalist  undertakings  into  public  services.^ 

Except  that  Jaures  lays  special  stress  upon  the  substi- 
tution of  public  for  private  authority  in  the  conduct  of 
"  large  capitalist  enterprises,"  and  upon  the  suppression  of 
the  "  great  capitalist  wealth,"  his  speech  at  Denain  hardly 
differs  in  any  way  from  that  of  Millerand  at  Vierzon.  At 
this  moment  (the  spring  of  1903),  it  appears  that  the 
majority  of  French  socialists  are  in  agreement  with  this 
programme,  and  oscillate  between  Jaures,  the  leader  of  the 
left  wing  of  parliamentary  socialism,  and  Millerand,  who 
represents  the  right  wing. 

The  "  Parti  Socialiste  francais,"  the  principal  section  of 

'  Le  Matin,  15th  March  1903. 
■^  Ibid.,  1 6th  March  1903. 


280  RENARD'S  ENQUIRY 

the  least  revolutionary  party  of  French  socialists,  which  is 
distinct  from  the  "  Parti  Ouvrier  "  of  Guesde  and  Vaillant, 
held  a  congress  at  Bordeaux,  in  April  1903,  at  which  the  re- 
tention of  Millerand,  who  was  present  and  explained  his 
views,  in  the  socialist  party  was  secured  by  a  small  majority. 
This  decision,  which  maintained  the  cohesion  of  the  princi- 
pal socialist  forces,  was  strongly  opposed  by  the  radical  or 
orthodox  socialists  known  as  the  "  Parti  Socialiste  de  France." 
This  party,  which  represents  the  doctrine  of  Marx  in  its 
primitive  purity,  under  the  direction  of  Guesde,  although 
they  could  not  enforce  the  acceptance  of  their  extreme 
views,  were  able  to  restrain  the  socialist  leaders  from 
diverging  too  widely  from  the  collectivist  ideal,  to  compel 
them  to  make  some  sacrifices  both  in  words  and  action,  and 
to  prevent  their  relapse  into  simple  radicalism. 

A  similar  evolution  of  socialism  is  going  on  throughout 
the  world,  although  no  doubt  there  are  degrees  in  the 
extent  to  which  the  renunciation  of  the  expectation  of  an 
immediate  realisation  of  the  Marxian  ideal  is  carried. 
Guesde  in  France,  Kautsky  in  Germany,  and  Hyndman  in 
England,  represent  the  most  faithful  adherents  of  the  old 
doctrine  ;  but  no  one  amongst  those  who  desire  that  it 
should  be  modified  dares  to  renounce  or  disavow  it ;  the 
differences  amongst  socialists  are,  in  fact,  but  of  very  little 
practical  importance ;  even  the  most  opportunist  of 
socialists  hesitates  to  repudiate  pure  collectivism,  which  is, 
as  it  were,  a  religion  whose  followers,  although  in  their  own 
consciences  they  modify  the  meaning  of  its  precepts  and 
refuse  to  submit  to  their  application,  do  not  venture  upon 
a  public  repudiation  of  its  dogmas. 

The  result  of  a  recent  enquiry  into  the  political 
differences  existing  amongst  socialists  was  published  in 
1903  under  the  title  oi  Enquete  sur  les  divergences  politiques 
du  Socialisme  actuel:  Documents  recueillis  et  comments 
par  le  Professeur  George  Renard} 

Renard,  by  whom  the  enquiry  was  undertaken,  is  not 
only  a  socialist,  but  a  declared  collectivist ;  he  is  a  professor 
at  the  School  of  Arts  and  Crafts,  a  post  created  for  him  by 
*  Revue  (formerly  Revue  des  Revues)  for  March  1903,  pp.  660-80. 


THE  QUESTIONS  ASKED  281 

Millerand  when  Minister  of  Commerce.  Renard's  object  is 
to  show  that,  notwithstanding  some  political  disagreement, 
there  is  no  real  difference  of  opinion  amongst  socialists,  as 
to  the  basis  and  the  economic  aims  of  their  doctrine.  He 
asks  whether  the  serious  divisions  of  opinion  in  the 
socialist  ranks  which  have  attracted  public  attention  in 
France,  Germany,  and  Italy,  have  arisen  upon  essential 
points  of  doctrine,  or  merely  upon  questions  of  tactics, 
upon  the  end  to  be  aimed  at  or  upon  the  best  method  of 
obtaining  it ;  is  it  a  question  of  a  general  change  of  direc- 
tion, or  of  a  more  .or  less  provisonal,  more  or  less 
exclusive  choice  between  different  roads  which  all  lead  in 
the  same  direction  ? 

Having  thus  clearly  defined  the  points  to  be  elucidated, 
Renard  addressed  twenty  persons,  of  importance  from  the 
socialistic  point  of  view,  in  the  following  countries,  four  in 
Germany,  one  in  Austria,  one  in  Belgium,  two  in  the 
United  States,  five  in  France,  two  in  Great  Britain,  three 
in  Italy,  one  in  the  Low  Countries,  and  one  in  Switzerland. 

No  reply  came  from  Germany.  Ten  replies  were  received 
in  all,  from  the  following  well-known  socialists  : — Emile 
Vandervelde,  for  Belgium  ;  Eugene  V.  Debbs,  for  the  United 
States ;  Aristide  Briant,  Edouard  Vaillant,  and  Renard 
himself,  for  France ;  H.  M.  Hyndman  and  Sidney  Webb, 
director  of  the  Fabian  Society,  for  Great  Britain ; 
Napoleone  Colajanni  and  Enrico  Ferri,  for  Italy ;  Domela 
Nieuwenhuis,  for  Holland  ;  and  Jean  Sigg,  for  Switzerland. 

These  ten,  or,  including  Renard,  eleven,  deponents  are 
fully  entitled  to  speak  in  the  name  of  socialism,  since  they 
are  representative  of  all  its  sections,  from  the  most  politic 
and  moderate,  represented  by  Sidney  Webb,  to  the  most 
ardent  and  impetuous,  of  which  Nieuwenhuis  is  the 
expositor. 

The  silence  of  Germany  is  of  small  importance,  since 
the  books  of  Bernstein  and  Kautsky  have  fully  enlightened 
us  as  to  the  aspirations  and  proposals  of  the  various 
socialist  groups  in  that  country.  Three  very  clearly  stated 
questions  were  asked — one  with  reference  to  a  purely 
doctrinal    question,   the    others    relating   to   methods   of 


282  THE  FIRST  QUESTION 

practical  application.  The  first  question  was  as  follows : — 
"  Do  you  acknowledge  that  the  economic  aim  of  socialism 
is  the  conversion  of  capitalistic  society  into  a  system  in 
which  property,  collective  in  respect  of  the  means  of 
production,  will  be  individual  only  as  regards  articles  for 
personal  use  ?  "  To  this  question,  all  the  deponents  may  be 
said  to  have  replied  in  the  affirmative.  Vandervelde 
writes  :  "  On  this  point,  all  instructed  socialists  are,  and 
must  be,  in  agreement."  Sidney  Webb,  with  equal  clear- 
ness as  regards  the  main  principle,  but  with  some 
modifications,  replied  thus :  "  Individual  possession  of  the 
land,  and  the  means  of  production,  appear  to  us  to  be  the 
cause  of  unnecessary  evils,  and  we  therefore  seek  to 
modify  the  opinions,  customs,  and  laws  which  allow  of  this 
individual  appropriation,  wherever  it  can  be  shown  that 
an  arrangement  of  the  opposite  kind  is  practicable  and 
would  probably  be  successful.  It  is  for  this  reason  that 
we  are  constantly  labouring  to  secure  the  substitution  of 
collective  property,  organisation,  and  administration  in 
such  or  such  a  form  of  capital,  or  in  such  or  such  a  locality, 
for  the  individual  property,  organisation,  and  administra- 
tion of  the  present  system.  The  ground  that  must  be 
traversed  before  this  substitution  can  be  effected,  appears 
to  us  to  be  enormous  and  for  the  moment  to  have  no 
assignable  limits.  It  is  clear  that  for  many  things  and  for 
many  services,  individual  is  preferable  to  collective 
administration  ;  it  is,  therefore,  impossible  to  imagine  a 
time  when  the  substitution  can  be  made  complete ; 
besides  this,  it  is  not  a  panacea — it  cannot  cure  all  evils,  and 
it  is  not  the  only  remedy  for  certain  of  these  evils." 

The  modifications  contained  in  these  last  lines  relate 
to  questions  of  method  of  procedure  and  the  duration  of 
the  transitional  period :  they  do  not  contest  the  principle 
of  the  condemnation  of  "  individual  property  of  the  land 
and  of  the  means  of  production."  The  second  English 
deponent,  Hyndman,  does  not  reply  directly  to  the 
question,  but  as  he  professes  a  contempt  for  Sydney  Webb 
and  his  school,  and  violently  attacks  Bernstein  and 
Millerand,  he  may  safely  be  classed  amongst  the  thorough- 


MEANING  OF  THE  REPLIES  283 

going  collectivists.  He  writes,  premising  that  without 
consultation  with  his  colleagues  he  can  only  speak  for 
himself:  "  I  think  you  attach  too  much  importance  to  the 
change  that  has  recently  occurred  in  the  socialist  camp. 
There  is  always  a  minority  of  temporisers  among  socialists 
of  all  countries,  and,  so  far  as  I  can  judge  from  an 
experience  of  twenty-two  years,  I  do  not  think  that,  in 
proportion  to  the  general  strength  acquired  by  the 
movement,  they  are  as  numerous  or  as  powerful  as 
formerly.  Here  at  any  rate,  the  Fabian  Society,  which 
has  done  all  in  its  power  to  retard  socialism  in  England, 
has  practically  no  influence  whatever  at  the  present 
moment.  The  '  Independent  Labour  Party '  has  been 
literally  compelled  to  accept  socialistic  principles,  although 
it  was  established  with  the  object  of  avoiding  this 
necessity.  It  is  true  that  the  leaders  of  to-day  intrigue 
and  temporise  abundantly.  But  this  will  not  continue, 
and  it  is  not  a  matter  which  in  my  opinion  need  be  taken 
seriously."  Renard  characterises  this  reply  as  a  fine 
sample  of  the  intransigeance  which  intensifies  personal 
discord. 

After  giving  a  summary  of  the  replies,  Renard  says : 
"From  all  these  replies,  in  which,  notwithstanding  some 
differences  easy  to  explain,  the  conclusions  are  almost 
identical,  there  appears  a  pronouncement  which  may  be 
accepted  as  indisputable — namely,  that  the  object  aimed 
at  by  socialism  is  the  transformation  of  private  property, 
not  in  its  entirety ,i  but  as  to  the  greater  part  (land,  means 
of  production,  and  transport)  into  social  or  collective 
property.  The  acceptance  of  this  essential  principle  is,  as 
it  were,  the  touchstone  by  which  a  socialist  can  be  recog- 
nised. This  is  sufficient  to  reduce  to  its  real  value  the 
socialism  of  the  salon  or  of  election  times,  which  professes 
to  set  up  a  fashionable  system,  whilst  proclaiming  the 
organisation  of  property  to  be  intangible."  Renard  may 
be    congratulated     upon    the    clearness    with    which    he 

'  This  reservation  of  Renard's  applies  only  to  the  property  in  articles 
of  personal  use,  clothes,  comestibles,  etc.,  always  subject  to  the 
condition  that  no  commercial  use  is  made  of  them. 


284  THE  SECOND  QUESTION 

stigmatises  the  drawing-room,  election,  or  church  socialism, 
or,  as  it  is  called  by  many  persons,  the  "good"  socialism, 
as  being  humbug  or  childishness,  or  a  combination  of  both- 
The  economic  aim  of  socialism,  according  to  those  reputed 
moderate,  as  well  as  to  the  most  ardent  and  fierce  of  its 
disciples,  is  undoubtedly  collectivism. 

The  second  question  put  by  Renard  is  thus  formulated  : 
"  Do  you  believe  that  the  desired  end  is  unattainable, 
except  by  means  of  a  violent  revolution?  Or,  while 
admitting  that  exceptional  circumstances  may  render 
revolution  unavoidable,  do  you  consider  that  it  would  be 
possible,  and  if  possible,  that  it  would  be  advisable  to 
endeavour  to  reach  the  desired  end  by  means  of  a  series  of 
legal  and  progressive  reforms  ?  " 

The  replies  to  this  question  as  a  rule  implicate  the 
simultaneous  approval  of  both  methods,  some  giving  the 
preference  to  revolutionary,  others  to  legal  procedure. 
Vandervelde  declares  that  the  interest  of  socialist  parties 
compels  them  to  make  use  of  any  weapon  that  is  available 
"  to  realise  gradually  all  the  fragments  of  revolution,  the 
sum  total  of  which  will  constitute  the  social  revolution  ; " 
Debbs  does  not  believe  that  a  violent  revolution  is  inevit- 
able ;  he  thinks  that  modern  political  conditions  are  such 
that  a  complete  social  revolution  may  be  accomplished 
without  recourse  to  force.  Sidney  Webb,  who  with 
Bernstein  and  Millerand  forms  the  right  wing  of  the 
socialist  party,  replies  thus :  "  It  is  evident  that  the 
supersession  of  private  property  and  administration  can 
only  be  accomplished  little  by  little.  The  possibility  of  a 
complete  simultaneous  transformation  of  a  complicated 
social  organisation  is  nothing  but  a  mental  delusion.  The 
impediment  to  transformation  is  the  innate  opposition  of 
each  citizen  to  change.  Before  ten  or  twenty  millions  of 
men  can  be  inspired  by  persuasion  with  a  desire  to  change 
the  whole  arrangement  of  their  social  life,  you  must  have 
persuaded  them  to  desire  the  alteration  of  one  or  two 
of  these  arrangements.  Then  they  will  not  wait  to  be 
persuaded  to  alter  all  the  others.  They  will  begin  by 
making  the  changes  they  wish  for.     Thus,  all  democratic 


A  RESUME  285 

reforms  will  come  little  by  little,  one  by  one.  It  is  of  no 
importance  to  ascertain  whether  this  evolutionary  move- 
ment is  or  is  not  satisfactory  to  us  :  all  that  is  necessary  to 
know  is,  whether  it  is  the  truth,  and  whether  we  are 
thoroughly  convinced  of  this."  Thus,  the  gradual 
realisation  of  collectivism,  in  spite  of  the  delay  which  this 
method  involves,  is  the  conception  and  the  aim  of  Sidney 
Webb,  and  of  the  Fabian  Society,  which  he  directs. 

In  summing  up,  Renard  expresses  himself  thus  :  "  In 
fine,  with  some  few  exceptions  on  the  extreme  left  or  the 
extreme  right,  the  sentiment  which  predominates  in  the 
replies  of  our  correspondents  appears  to  be  a  desire  for 
partial  and  progressive  reforms,  without  any  abandonment 
of  a  belief  in  the  possibility,  or  even  the  necessity,  of  a 
revolution  to  complete  the  half-accomplished  evolution  of 
collectivism.  A  policy  of  reform  at  ordinary  times :  a 
policy  of  revolution  if  necessary.  Some  incline  towards 
the  former,  others  to  the  latter  of  these  policies ;  there  are 
distinct  shades  of  difference  of  opinion,  which  correspond  to 
preferences  for  more  or  less  rapid,  or  more  or  less  certain 
methods  for  creating  the  desired  future." 

This  resuvte  appears  to  be  inaccurate,  since  it  is  clear 
that  Nieuwenhuis,  Vaillant,  and  Briant  are  in  favour  of 
revolution,  of  which  Sigg  also  approves,  although  he 
relegates  it  to  a  more  distant  epoch ;  whilst  on  the  other 
hand,  Debbs  and  Sidney  Webb  repudiate  this  idea,  and 
Colajanni  agrees  with  them.  The  intermediate  opinion  is 
that  of  Ferri  and  Vandervelde.  It  appears,  therefore, 
from  this  unwittingly  misleading  risumi,  that  the  enquirer 
Renard  goes  further  than  Debbs  and  Sidney  Webb,  and  it 
is  clearly  his  own  opinion  to  which  he  gives  expression 
when  speaking  of  the  generality  of  the  "belief  in  the 
possibility  or  even  the  necessity  of  a  revolution,  to 
complete  the  half-accomplished  evolution  of  collectivism." 
It  is  clear  that  the  professor,  detaching  himself  from  the 
right  wing  of  the  socialist  party  and  taking  up  a  position 
in  the  centre,  approves  of  the  idea  of  a  final  revolution, 
the  way  being  prepared  for  it  by  a  policy  of  reform. 

The  third  question  asked  in  this  enquiry  was  :     "  What, 


286  THE  THIRD  QUESTION 

in  your  opinion,  should  be  the  attitude  of  socialists,  with 
reference  to  the  bourgeois  parties  in  electoral  contests  or 
in  parliament,  in  relation  to  ministerial  proposals  for 
democratic  reform  ?  " 

Nieuwenhuis  and  Vaillant  are  violently  opposed  to 
any  alliance  with  the  bourgeois  party,  and  Ferri  is 
opposed  to  any  sacrifice  of  the  future  by  the  acceptance 
of  temporary  benefits,  and  attacks  English  trades-unionism. 
Sigg  strongly  approves  of  alliances  with  the  bourgeois 
party.  Vandervelde  admits  that  occasional  co-operation 
for  definite  ends  with  other  parties  may  be  desirable, 
but  "considers  that  for  a  socialist  to  participate  in  a 
bourgeois  government  would  be  a  dangerous,  not  to 
say  fatal,  expedientl^  and  reminds  socialist  representatives 
that  they  must  never  for  a  moment  lose  sight  of  the 
essential  difference  between  them  and  the  representatives 
of  other  parties.  The  bourgeoisie  introduces  reforms 
with  the  hope  (although  chimerical)  of  strengthening  the 
capitalist  regime  by  improving  it;  socialists,  on  the  con- 
trary, advocate  the  same  reforms,  with  the  hope,  which  is 
justified,  of  making  the  wage  earners  stronger  and  more 
energetic  in  their  struggle  for  complete  emancipation, 
which  can  only  be  secured  by  the  intervention  of  a 
collectivist  regime.  Briant  merely  refers  to  the  advan- 
tages derived  from  the  mutual  help  given  by  advanced 
republicans  and  the  socialist  proletariat  to  each  other. 
Debbs's  reply  is  a  reserved  one ;  he  wishes  to  have  nothing 
to  do  with  the  middle-class  party,  to  preserve  the  political 
independence  of  the  socialist  party,  and  to  make  it  the 
only  party  of  the  wage-earning  classes,  and  the  one 
destined  to  achieve  their  emancipation.  Colajanni  is 
more  disposed  to  compromise,  and  thinks  that  both  in 
electoral  contests  and  in  parliament,  the  socialist  party 
should  ally  itself  with  those  of  the  bourgeois  who, 
for  moral  reasons  or  from  interested  motives,  are  pre- 
pared to  make  political  and  economic  concessions.  The 
reply  of  Sidney  Webb  is  to  the  same  effect ;  the  head 
of  the  Fabian  school  is  pre-eminently  a  tactician.  "  I  am 
of  opinion,"  he  says,  "  that  we  should  work  in  collaboration 


A  PRE-EMINENT  TACTICIAN  287 

with  persons  of  all  opinions  for  reforms  in  respect  of  which 
we  are  in  accordance  with  them.  In  England,  persons 
who  hold  the  most  diverse  opinions  upon  religious, 
political,  or  economical  questions,  unite  in  order  to 
secure  a  common  object,  which  for  various  reasons  they 
may  think  a  desirable  one,  and  this  in  no  way  prevents 
their  taking  part  simultaneously  in  other  combinations 
to  obtain  some  different  object.  Thus,  we  are  all  of 
us  at  the  same  time  allies  in  one  field  of  action  and 
adversaries  in  another."  Such  an  arrangement  may  be 
either  very  clever  or  very  naif ;  in  this  case  the  ability 
is  with  the  socialist  leader,  the  naivete  is  shown  by  the 
bourgeois  electorate.  Hyndman's  opinion  is  not  more 
explicitly  expressed  in  reply  to  this,  than  to  the  two 
preceding  questions,  but  the  same  resolute  refusal  to 
compromise,  which  characterises  his  general  response, 
appears  here  also. 

The  general  feeling  of  socialists  is  shown  very  clearly 
by  this  enquiry ;  the  divisions  amongst  them  are  more 
apparent  than  real.  The  complete  transformation  of 
modern  society,  and  the  substitution  of  collective  for 
private  ownership  of  all  the  means  of  production  of 
every  kind,  continues  to  be  their  avowed  object;  the 
tactics  to  be  adopted  in  seeking  to  obtain  it  are  the 
only  reasons  for  diversity  of  opinion.  R^nard  concludes  : 
"We  confine  ourselves  to  summarising  the  results  at 
which  we  have  arrived,  in  the  following  way  : — Unanimity 
as  to  the  economic  end  aimed  at :  difference  as  to  the 
general  method  to  be  followed  in  order  to  attain  it ; 
active  dissension  as  to  the  plan  of  action,  and  upon 
the  part  to  be  taken  by  groups  and  by  politicians  who 
have  a  preference  for  one  or  other  of  these  methods." 
Even  these  last-mentioned  dissensions  are,  however,  of 
small  importance.  When  battle  is  joined,  either  at 
election  time  or  in  parliament,  these  dissensions  dis- 
appear, and  a  solid  front  is  presented.  Hyndman  sums 
up  the  position  accurately  in  these  words  :  "  All  these  dis- 
cussions here  and  elsewhere,  have  not,  as  far  as  I  can 
judge,  caused  the  slightest  vacillation  in  the  socialist  ranks." 


288  "SOCIALISME  R^FORMISTE'' 

Since  what  is  known  as  the  catastrophic  theory — that  is, 
the  proximate  spontaneous  destruction  of  capitalistic 
society  foretold  by  Marx — has  been  abandoned  by  the 
majority  of  socialists,^  and  a  system  of  gradual  conquest 
has  been  generally  adopted,  it  is  advisable  to  examine 
the  system  advocated  by  the  "  Socialiste  R^formistes,"  by 
means  of  which  the  way  for  collectivism  is  to  be  prepared. 
The  three  principal  representatives  of  the  "  Socialisme 
R^formiste  "  are  :  Millerand,  who,  it  is  believed,  was  the  first 
to  use  this  designation  in  France  ;  ^  Bernstein,  who,  follow- 
ing the  method  of  Kant,  prefers  the  name  "Socialisme 
Critique,"  in  Germany ;  and  Sidney  Webb  in  England. 

Of  these  three,  the  first  named  has  been  the  most 
active  in  the  field  of  politics,  whilst  from  the  point  of  view 
of  the  practical  application  of  the  system,  the  third,  Sidney 
Webb,  has  given  the  most  precise  directions  for  procedure, 
and  has  secured  the  greatest  measure  of  success ;  between 
these  two,  and  in  agreement  with  them,  Bernstein  is  the 
most  remarkable  temporiser  amongst  socialist  theorists. 
Jaures  in  France  and  Vandervelde  in  Belgium  approxi- 
mate to  these  men  in  opinion  ;  but  although  ready  to 
avail  themselves  of  opportunist  action,  they  consider  that 
the  coUectivist  ideal  will  be  more  quickly  realised  than 
is  supposed. 

In  point  of  fact,  modern  society  is  no  longer  confronted 
with  a  revolutionary  change,  but  with  a  reforming  socialism 
which  is  content  to  proceed  by  steps,  as  to  the  number  and 
length  of  which  each  one  has  his  own  opinion.  The 
genuine  Marxists  deplore  this  policy,  which  they  regard 
as  pusillanimous,  although  in  reality  it  is  evidence  of  the 
ability  of  their  successors. 

Engels,  in  his  preface  to  the  third  volume  of  Das 
Kapital,  speaks  disdainfully,  both  of  political  economy 
of  a  certain  theory,  as  to  which  he  says :  "  It  is  possible 

*  It  should  be  remembered,  however,  that  the  catastrophic  theory 
has  still  many  adherents  besides  Guesde  in  France  and  Kautsky  in 
Germany. 

2  The  title  of  his  last  book  is  Le  Socialisme  Reformiste  franqais^ 
Biblioth^que  Socialiste,  Paris,  1903. 


ADOPTION  OF  NEW  SYSTEM  289 

to  construct  a  popular  system  of  socialism  as  plausible  as 
that  which  has  been  established  in  England,"  ^  but  the 
Fabian  school,  although  excommunicated  by  Engels,  is 
to-day  triumphant,  not  indeed  without  incurring  the 
wrath  of  the  purists,  but  without  creating  any  permanent 
schism  or  fissure  in  the  socialist  ranks.  The  new  system, 
which  has  been  widely  adopted  in  England,  Belgium,  and 
France,  and  is  advocated  by  Bernstein  in  Germany, 
comprises  the  following  five  points : — 

I.  The  development  of  co-operative  associations,  especially 

for  articles  of  consumption,  and  the  employment  of 
their  personnel  and  financial  resources,  in  aid  of 
socialistic  propaganda,  and  for  the  realisation  of 
socialistic  aims. 

II.  The    creation    of    the    greatest    possible    number    of 

municipal  or  state  industries,  and  of  municipal  or 
national  monopolies. 

III.  The   energetic   formation   of  trades-unions,  favoured 

and  invested  with  privileges  by  the  state,  which 
would  supply  weapons  available  for  political  war- 
fare, as  well  as  means  of  domination  in  the 
industrial  domain. 

IV.  The  institution  of  new  laws  for  working  men,  in  order 

to  secure  increased  legal  advantages  for  the  pro- 
letariat. 

V.  Lastly,  the  crushing  of  the  wealthy  and  middle  classes 

by  progressive  taxation,  which  would  check  the 
formation  or  durability  of  large  private  fortunes. 

Co-operative  associations,  industrial  or  agricultural, 
are  of  various  types  ;  but  it  is  understood  that  those  here 
referred  to,  are  those  which  are  directed,  not  by  an 
employer,  or  by  associated  capitalists,  but  by  managers 
directly  representative  of  the  personnel  employed,  or  of 
the  whole  of  the  customers,  and  for  the  exclusive  benefit 
of  this  personnel,  or  of  these  customers.  ^ 

*  Le  Capital^  critique  de  PEconomie,  vol.  iii.  (French  translation), 
1901,  preface  by  Engels,  p.  11. 

^  See  Traits  thiorique  et  pratique  d'Lconomie  politique^  3rd  ed,, 

T 


290     VALUE  OF  CO-OPERATIVE  ASSOCIATIONS 

For  a  long  time  these  associations  were  scoffed  at  by 
socialists,  but  during  the  last  fifteen  years  the  school  of 
"  Socialistes  Reformistes "  perceived  that  they  might  be 
of  great  use  by  concentrating  wage  earners,  and  thus 
aiding  the  diffusion  of  socialistic  education,  and  by 
facilitating  the  collection  of  funds  in  aid  of  socialistic 
propaganda,  and  of  electoral  contests.  For  these  reasons, 
Sidney  Webb  in  England,  Jaures  in  France,  and  Bernstein 
in  Germany,  are  enthusiastic  advocates  of  co-operative 
associations  of  consumers,  which  they  always  endeavour 
to  guide  in  a  direction  foreign  both  to  their  proper 
principles  and  to  their  natural  economical  aims. 

Co-operative  associations  for  production  were  at  first 
received  with  favour  by  socialists.  In  France  in  1831, 
and  later  in  1848,  many  of  these  associations  received  the 
support  of  the  government ;  and  in  Germany,  Lassalle,  in 
the  flirtations  with  Bismarck,  which  he  entered  upon  before 
his  death  in  1864,  demanded  a  hundred  million  thalers 
from  the  government  as  a  subvention,  in  support  of  the 
workmen's  associations,  which  he  thought  would  effect  a 
transformation  of  the  system  of  production ;  but  his 
aspirations  were  not  gratified.  Marx  was  always 
sceptical  as  to  the  future  of  co-operation,  and  his  appre- 
hension that  these  associations  might  degenerate  into 
mere  bourgeois  joint  stock  companies,  as  has  usually 
been  the  case,  does  honour  to  his  perspicacity.  Co- 
operative production  has  now  been  in  existence  for 
seventy-two  years  since  its  inception  by  Buchez  in  1831, 
who  established  the  company  of  joiners  in  that  year ;  this 
was  followed  in  1834  by  the  better  known  company  of 
gilders.  Experience,  therefore,  has  been  sufficiently  pro- 
longed to  make  it  possible  to  form  an  opinion,  and  it  is 
clear  that  although  under  specially  favourable  circum- 
stances these  associations  may  be  successful,  there  is 
nothing  to  show  that  the  system  is  capable  of  general 
application.  Bernstein's  condemnation  of  these  associa- 
tions for  production  is  almost  unqualified ;  he  points  out 

1900,  vol.  ii.,  pp.  556-643,  and  La  Question  Ouvriirc  au  XJX"^  Siecle^ 
by  P.  Leroy  Beaulieu. 


CO-OPERATIVE  ASSOCIATIONS  IN  FRANCE    291 

that  the  history  of  those  which  have  become  economically 
successful,  supplies  an  even  more  emphatic  warning,  from 
the  socialistic  point  of  view,  than  that  given  by  those 
which  have  failed,  since  it  proves  that  success  implies 
privilege  and  exclusiveness.  "  Far  from  sapping  the 
foundations  of  the  existing  economic  system,  they  [i.e., 
these  associations]  rather  furnish  evidence  of  its  relative 
solidity."  ^  This  conclusion  is  incontrovertibly  correct ; 
it  has  been  shown,  especially  with  respect  to  associations 
for  production,  that,  as  they  expand,  they  depart  from  the 
pure  co-operative  type,  and  in  the  long  run  develop  into 
"  societ^s  anonymes  "  or  joint  stock  companies ;  as  a  rule, 
they  treat  their  employees  in  the  same  way  as  do 
individual  employers,  neither  recognising  their  rights 
nor  giving  them  any  special  advantages.  In  France, 
notwithstanding  the  active  support  of  the  government 
and  the  municipalities,  we  find  that  whilst  in  1868  there 
existed  57  co-operative  productive  associations  in  Paris, 
in  1903  the  number  had  only  risen  to  84,  and  that  nearly 
all  those  which  had  existed  in  1868  had  disappeared; 
just  as,  by  1868,  most  of  those  founded  between  1831  and 
1850  were  no  longer  in  existence.  Many  associations 
which  are  not  actuated  by  the  true  co-operative  spirit 
take  advantage  of  the  very  considerable  privileges  offered 
by  government  and  municipal  regulations ;  with  this 
object,  they  become  affiliated  to  the  "  Chambre  Consulta- 
tive des  Associations  ouvrieres  de  production,"  and  this 
is  probably  true  of  quite  one-half  of  the  84  associations 
referred  to.  In  the  provinces  89  associations  are  affiliated, 
but  many  are  pseudo-co-operative ;  nearly  all  of  them 
carry  on  small  industries,  requiring  but  little  capital. 
The  causes  of  the  failure  of  these  purely  productive 
associations,  from  the  moral  as  well  as  from  the  economic 
point  of  view,  have,  says  Bernstein,  been  admirably  shown 
by  Miss  Beatrice  Potter  (Mrs  Sidney  Webb),  who,  in 
common  with  most  English  co-operators,  holds  that  a 
wage  earners'  association  for  production  is  neither  social- 
istic nor  democratic,  but  individualistic.  If  the  wage 
*  Bernstein,  op.  at.,  pp.  168,  169. 


292  INCOMPATIBLE  WITH  EQUALITY 

earners  are  the  exclusive  owners,  complete  equality  in 
the  workshops  is  assumed ;  but  as  soon  as  the  industry 
attains  more  than  the  most  modest  dimensions,  subordina- 
tion to  direction  becomes  unavoidable.  The  consequent 
disappearance  of  equality  removes  the  corner-stone  of 
the  edifice,  and  its  destruction  will  soon  follow.  This  is 
how  these  associations  become  transformed  into  ordinary 
commercial  enterprises.  If,  however,  equality  is  main- 
tained, expansion  is  impossible,  and  the  business  must 
always  remain  of  insignificant  proportions.  These  are 
the  alternatives  which  confront  all  purely  productive 
associations.^ 

Bernstein  points  out  that  the  idea  that  modern 
production  develops  an  adaptability  for  co-operative 
labour  is  a  quite  mistaken  one;  the  history  of  all  these 
associations  shows  that  the  maintenance  of  equality  is  an 
insoluble  problem,  and  that  even  when  all  else  goes  well, 
they  are  wrecked  by  the  absence  of  discipline.  When  the 
manager  is  the  nominee  of  the  workmen  and  his  position 
depends  upon  their  goodwill,  efficient  direction  of  their 
labour  is  impossible :  such  a  position  has  hitherto  proved 
untenable,  and  the  result  has  always  been  that  the  form 
of  co-operation  has  been  altered.  The  larger  and  more 
complicated  the  industry,  the  more  the  inherent  defects 
of  these  associations  are  felt.  "  What  is  generally  known 
as  co-operative  labour,  is  merely  collective  in  the  sense 
that  the  work  is  so  simple  that  it  can  be  performed  by 
groups  of  workmen  without  differentiation  of  function."  ^ 

These  reflections  are  both  forcible  and  true,  and, 
although  they  are  not  novel,  are  interesting  as  coming 
from  a  socialist  writer,  thoroughly  imbued  with  collectivist 
principles.  This  condemnation  of  co-operative  association 
for  production,  as  a  system  capable  of  general,  if  not  of 
universal  application,  amounts,  in  fact,  to  a  condemnation 
of  the  whole  theory  of  collectivism,  which  assumes  the 

'  Bernstein,  op.  cti.,  pp.  169-70.  In  1870,  long  before  Bernstein 
wrote,  these  conclusions  were  stated  in  the  Question  ouvrilre  au 
XIX'^  Sikle,  by  P.  Leroy  Beaulieu. 

*  Bernstein,  op.  cit.y  pp.  171-76. 


TENDENCY  TOWARDS  OLIGARCHY        293 

general  subjection  of  the  leaders  of  industry  to  their 
subordinates.  It  is  obvious  that  ordinary  joint  stock 
companies  could  by  no  possibility  carry  on  their  business 
successfully  if  the  shareholders  chose  to  assume  the 
direction  of  the  business  or  attempted  to  exercise  a  close 
control  over  it.  The  infrequency  of  general  meetings — 
one,  or  at  the  most  two,  yearly — the  meagre  information 
given  on  these  occasions,  the  practically  absolute 
authority  of  the  directors — authority  which  is  again 
further  concentrated  in  the  hands  of  two  or  three,  if  not 
in  those  of  one  person — are  all  of  them  necessary  condi- 
tions for  the  successful  working  of  most  industrial  or 
commercial  companies,  and  this  is  even  more  true  of  such 
associations  for  production  as  those  referred  to,  in  which 
the  interest  of  members  would  not  be  merely  that  of 
shareholders,  but  would  include  their  personal  work  and 
professional  remuneration.  Even  if  such  associations 
could  be  successfully  developed,  they  would  in  nowise 
assist  socialism,  and  on  this  point  all  the  more  clear- 
sighted socialists  are  agreed. 

A  German  writer,  of  socialistic  tendencies,  Dr  Frank 
Oppenheimer,  in  a  book  on  agricultural  associations, 
has  indicated  with  clearness  a  distinction  between  associa- 
tions of  buyers  and  associations  of  sellers.  Associations 
of  buyers  are  essentially  democratic  in  character;  their 
objects  are  identical,  and  are  in  harmony  with  the  interests 
of  the  whole  community.  But  those  of  associations  of 
sellers  are  of  a  very  different  character:  they  are  far 
more  complex ;  and  the  interests  of  different  associations 
soon  ceases  to  be  the  same — each  one  seeks  for  the  best 
market  for  its  own  products,  and  they  are  thus  quite  as 
antagonistic  to  the  interest  of  their  social  environment  as 
is  an  individual  trader.  According  to  Sidney  Webb  and 
Gide,  their  tendency  is  towards  oligarchy,  and  Bernstein 
also  calls  attention  to  the  exclusive  character  of  "  industrial 
associations  for  production."  ^  He  points  out  that  society 
would  have  the  same  grounds  for  disagreement  with  them 
as  with  capitalistic  undertakings,  and  adds  :  "  It  remains  to 
'  Bernstein,  op,  cit.^  p.  197. 


294     "EQUITABLE  PIONEERS  OF  ROCHDALE'' 

be  seen  whether  agreement  with  them  would  be  always 
more  easy  to  arrive  at."^  Gide  points  out  that  the 
tendency  of  such  associations  must  be  to  place  their  own 
interests  before  those  of  the  community,  and  says  that 
the  egoism  of  a  collectivist  association  is  even  more  fully 
developed  and  more  stubborn  than  that  of  an  individual ; 
in  this  respect,  he  asserts,  wage  earners  are  no  better  than 
employers,  and  he  goes  on  to  say :  "  Not  only  will  these 
associations  for  production  be  in  antagonism  with  con- 
sumers, but  they  will  be  at  war  with  each  other,  as  are 
the  traders  of  to-day,  and  will  thus  bring  about  the 
industrial  anarchy  which  we  are  so  rightly  endeavouring 
to  suppress."  ^ 

It  is  evident,  therefore,  that  notwithstanding  the  enthu- 
siasm which  the  idea  of  co-operation  aroused  between 
1 83 1  and  185 1,  and  again  between  i860  and  1870,  it 
has  been  relegated  by  the  more  thoughtful  "  Socialistes 
r^formistes"  and  socialistic  economists,  to  the  company 
of  those  systems  for  the  regeneration  of  society  which 
they  consider  inefficacious  ;  it  is  condemned,  not  only  on 
the  ground  of  the  difficulty  of  its  application,  but  also 
because  of  the  defects  and  antagonisms  which  are 
inherent  in  it. 

As  has  already  been  stated,  "  Socialistes  reform istes  " 
rely  largely  upon  co-operation  as  a  preparation  for 
collectivism,  and  as  a  means  of  obtaining  the  resources  for 
war  and  for  propagandism ;  but  it  is  to  co-operative 
associations  of  consumers,  not  to  those  of  producers,  that 
they  look  for  assistance.  There  is  no  doubt  that  these 
associations  have  been  very  successful.  Their  triumphs 
are  noted  by  Bernstein  with  much  satisfaction,  and  he 
takes  an  optimistic  view  of  their  future  development.  The 
first  notable  example  of  this  kind  of  association  appeared 
in   1844,  under  the  name  of  the  "Equitable  Pioneers  of 

'  Bernstein,  op.  cit.,  pp.  173-74. 

2  De  la  co-operation  et  des  transformation  qu'elle  est  appeU  d. 
realiser,  by  Charles  Gide,  pp.  18-20 ;  see  also,  Traiid  theorique  et 
Pratique  d^ Economic  politique.,  P.  Leroy  Beaulieu,  vol.  ii.,  p.  623 
et  seq. 


BOURGEOIS  ELEMENT  IN  CO-OPERATION    295 

Rochdale,"  the  successful  development  of  which,  during  the 
sixty  years  that  have  elapsed  since  its  establishment,  is  a 
splendid   testimony  to   the   superiority  of  associations  of 
buyers  over  those   of  sellers.     The  plant  of  co-operation 
found  a  favourable  soil  in  the  domain  of  "consumption," 
and  flourished  amazingly,  not,  of  course,  without  check  or 
relapse,  but  its  successes  have  been  numerous  and  some- 
times startling.     Bernstein,  whilst  noting  that  the  continual 
growth  of  public  services,  both  state  and  municipal,  must 
limit  the   expansion   of  co-operation,   and   that   for   this 
reason    it    could    never    embrace   the   whole    system    of 
production  and   distribution,  asserts  that  a  great  field  of 
action  remains  open  for  its  operation,  and  adds  that,  *'  in 
view  of  the  fact  that  the  movement  initiated  by  the  weavers 
of  Rochdale,  with  a  capital  of  twenty-eight  pounds,  has, 
within  fifty  years,  secured  the  command  of  a  capital  of 
twenty  millions  sterling,  it  would   be  rash  to  attempt  to 
define  the  distance  still  to  be  traversed  before  the  limits  of 
this  expansion  will  be  reached,  or  the  forms  the  movement 
may  still  assume."     The  prophecies,  however,  of  the  more 
ardent  advocates  of  co-operation,  are  obviously  extravagant. 
Bernstein  himself  recognises  that  suppression  or  reduction 
of  dividends  would   greatly  restrict  the  progress  of  the 
movement.     He   refers  also   to  the  complaints  made  by 
the  co-operative  journals,  of  the  difficulty  experienced  by 
the  British  societies  in  finding  a   profitable  use  for  their 
disposable  capital,  and  admits  that  "  a  slackening  of  the 
rate  of  increase  of  these  associations  for  consumption  must 
at  some  given  moment  become  an  almost  mathematical 
certainty."^       It     must    also     be     remembered   that    the 
bourgeois    class    has    taken   a   large   share,   both   in   the 
initiation  and  the  direction  of  the  movement.     In  England, 
the   "  Army    and    Navy "   and    the  "  Civil    Service "    co- 
operative societies  were  founded  by  this  class,  and  in  all 
countries    the    bourgeois    element    plays    an     important 
part  in  a  great  number  of  small  local  co-operative  societies. 
It  is  therefore   an  error  to  regard  co-operation  as  being 
exclusively  a  workman's  movement. 

*  Bernstein,  op.  cit,  p.  178. 


296  AN  INGENIOUS  SUGGESTION 

It  appears  probable,  also,  that  as  time  goes  on,  many  of 
these  associations  will  either  disappear  or  will  change  their 
character  and  tend  to  become  joint  stock  companies ;  their 
mission  appears  to  have  been  the  mitigation  of  the  abuse 
of  retail  trade,  but  not  the  suppression  of  the  small  trader, 
and,  as  Bernstein  points  out,  "opportunities  constantly 
happen  which  offer  the  individual  trader  a  chance  of 
adapting  himself  to  the  altered  conditions ; "  ^  but  the 
reformation  of  abuses  is  too  restricted  a  rdle  for  the 
enthusiastic  partisans  of  the  movement ;  thus  limited, 
co-operation  could  not  effect  the  transformation  of  society. 
With  much  ingenuity,  socialists  of  all  kinds — Bernstein, 
Vandervelde,  and.  socialistic  economists,  such  as  Gide 
— suggest  that  a  practice  often  successfully  adopted  by 
certain  great  British  or  Belgian  co-operative  societies, 
might  be  utilised  in  the  attempt  to  make  these  societies 
the  pivot  of  a  great  social  transformation.  The  practice 
referred  to  is  the  establishment  of  small  societies  for  the 
manufacture  of  various  articles,  affiliated  to  a  parent  society 
but  working  independently  of  it :  these  societies,  assisted 
by  the  capital  and  administrative  experience  of  the  parent 
society,  and  having  it  as  their  customer,  meet  with  far 
fewer  difficulties,  or  surmount  them  with  far  greater  ease 
than  ordinary  autonomous  associations  for  production. 

"  We  see,"  says  Bernstein,  "  that  those  associations  for 
production  are  the  most  successful  which,  whether  estab- 
lished by  trade-union  capital  or  by  that  of  associations  of 
consumers,  do  not  manufacture  principally  for  the  profit 
of  their  employees,  but  for  that  of  a  much  larger  body,  of 
which,  if  the  spirit  prompts  them,  the  employees  may  form 
part ;  these  associations  therefore  assume  a  form  which 
approaches  the  socialistic  ideal."  He  adds  that,  in  spite  of 
the  advantages  they  enjoy,  both  for  production  and  sale, 
the  manufacturing  establishments  affiliated  to  the  great 
English  societies,  often  require  a  considerable  time  before 
their  products  can  compete  with  those  of  private  industry. 
Although  the  success  of  these  affiliated  societies  is  far  from 
being  assured,  Bernstein  has  some  justification  for  saying 
*  Bernstein,  op.  cit.,  p.  178. 


THE  IDEAL  OF  CO-OPERATION  297 

that  they  give  an  "  indication  "  of  the  direction  to  take  "  if 
it  is  desired  to  extend  and  efficiently  develop,  in  the 
shortest  time  possible,  the  organisation  of  the  wage 
earners."^  Gide,  in  the  pamphlet  already  referred  to, 
which  was  an  address  given  at  the  opening  of  the  inter- 
national congress  of  co-operative  societies  of  consumers, 
held  at  Paris  on  the  8th  of  September  1889,  describes  with 
the  greatest  clearness  and  precision,  both  the  aims  and  the 
method  of  contemporaneous  co-operation.  This  address 
becomes  still  clearer  if  read  in  connection  with  other 
writings  of  the  same  author.  Although  he  is  not  classed 
with  socialists,  but  with  socialistic  economists,  Gide's 
exposition  shows  far  better  than  that  made  by  any 
socialist,  the  kind  of  evolution  which  enthusiasts  expect 
from  co-operation,  which  ought  to  approach  that  of 
collectivism.  "  Co-operation,"  he  says,  "  is  for  us  not 
merely  an  institution  intended  to  improve  the  condition  of 
wage  earners  by  enabling  them  to  spend  a  little  less  or  to 
gain  a  little  more  ;  it  is  destined  gradually  to  abolish  wage 
earning,  by  giving  workmen  the  instruments  of  produc- 
tion and  by  suppressing  middle  men,  including  adventurers 
{entrepreneurs).  Co-operation  does  not  contemplate  the 
suppression  of  capital,  but  only  the  suppression  of  its  right 
to  claim  profit  or  dividends,  by  reducing  it  to  a  reasonable 
amount ;  above  all,  the  object  is  to  give  co-operation  an 
ideal,  and  to  elevate  minds  by  pointing  out  an  object 
which  at  any  rate  is  worth  the  trouble  of  winning."  ^ 

Gide  goes  further  than  Bernstein  in  asserting  the 
approximation  of  the  co-operative  to  the  collective  ideal. 
"  It  is  certain,"  he  says,  "  that,  carried  to  its  further  limits, 
co-operatism,  if  I  may  be  allowed  this  neologism,  would 
end  in  an  organisation  very  analogous  to  the  collectivist 
ideal.  .  .  ."  He  honestly  admits  that  "  it  is  open  to  some 
of  the  same  dangers  as  collectivism,"  ^  but  is  reassured, 
however,  by  the  reflection  that  the  co-operative  movement 
would  be  a  free  one. 

*  Bernstein,  op.  cit.,  p.  201. 

2  Revue  cT Economie  politique,  January  1893,  p.  17. 

■''  Gide,  op.  cit.^  p.  17  et  seq. 


298  A  PLAN  OF  CAMPAIGN 

Dwelling  upon  the  true  objects  of  co-operation,  Gide 
expresses  himself  thus  : — "  It  should  modify  peacefully 
but  radically  the  present  economic  system,  by  causing 
the  means  of  production,  and  with  them  economic 
supremacy,  to  pass  from  the  hands  of  the  manufacturers, 
who  now  hold  them,  into  the  hands  of  the  consumers.  .  .  . 
It  goes  without  saying,  that  those  who,  like  ourselves, 
cherish  this  ideal  of  co-operation,  cannot  approve  of  the 
diversion  of  its  forces  from  this  object  to  scatter  them 
in  other  directions,  as,  for  example,  in  the  establishment 
of  pensions  or  insurance,  which  would  have  the  effect  of 
transforming  co-operative  into  provident  associations.  I 
hold  that  it  is  degrading  to  co-operation  to  make  it  serve 
individualist  ends,  and  that  its  true  function  is  to  assist  the 
aims  of  collectivism.  The  function  of  co-operation  is  not 
the  protection  of  the  individual,  but  social  improvement."  ^ 
Gide  greatly  underestimates  the  difficulties  of  the  exten- 
sion of  co-operation,  and  neglects  to  take  note  of  those 
experienced  by  the  great  English  societies  in  attempting 
to  employ  their  capital  for  the  extension  of  the  system. 
He  lays  down  a  plan  of  campaign  with  great  clearness ; 
according  to  him,  the  first  step  towards  the  conquest  of 
the  world,  is  to  arouse  the  spirit  of  co-operation,  "  the  co- 
operative faith,"  which  in  England  makes  a  religion  of  the 
idea  of  co-operation ;  ^  when  this  has  been  accomplished, 
the  next  stage  is  that  co-operative  associations  should 
combine  and  make  purchases  upon  a  grand  scale;  then, 
that  they  should  secure,  always  by  refraining  from  the 
payment  of  dividends,  the  command  of  a  large  capital, 
and  use  it  in  the  direct  production  of  all  articles  required ; 
the  last  stage  is  that  at  some  future  time,  more  or  less 
distant,  these  associations  should  acquire  land  and  farms, 
for  the  direct  production  of  corn,  wine,  and  oil,  etc.,  all 
such  commodities,  in  fact,  as  form  the  basis  of  consumption. 
To  sum  up,  the  first  stage  is  the  conquest  of  commercial 
ifidustry,  and  the  second,  that  of  manufacturing  industry ; 

*  Gide,  op.  cit.^  pp.  21,  23. 

2  Revue  cP ^conomie  politique^  January  1893,  p.  16. 


CO-OPERATION  IN  BELGIUM  299 

such  ought  to  be  the  progress  of  co-operation  in  every 
country.     It  is  one  of  heroic  simplicity."  ^ 

Heroism  and  simplicity,  however,  are  not  characteristics 
of  the  normal  types  of  industry,  or  of  society,  and  notwith- 
standing the  success  obtained  by  numerous  associations 
of  consumers,  neither  experience  nor  reason  would  assign 
to  this  kind  of  association  the  all-conquering  destiny  its 
apostles  claim  for  it.  Co-operation,  immense  as  is  its 
field  of  action,  so  long  as  it  asks  only  for  free  association 
and  abjures  all  state  favours  and  subventions,  is  not 
strictly  a  socialistic  enterprise,  except  in  so  far  as,  like 
collectivism,  it  desires  the  elimination  of  individual  enter- 
prise, and  the  control  of  capital.  It  is  nevertheless  looked 
upon  at  the  present  time  as  an  auxiliary  to  socialism,  and 
Gide's  recommendations  have  been  largely  adopted  by  the 
Belgian  socialists.^  In  Belgium  it  is  not  a  question  of 
co-operative  associations  instituted  merely  for  economical 
or  commercial  ends,  and  open  to  all :  the  associations  in 
that  country  are  close  institutions,  their  object  being  to 
form  a  recruiting  agency  for  socialism,  and  for  the 
provision  of  funds  for  socialistic  propaganda.  The  terms 
for  admission  into  these  societies  and  the  employment  of 
their  profits  are  described  by  Vandervelde.  Their  regula- 
tions are : — 

A.  That  the  society  is,  before  all  things,  a  socialistic 
political  party,  and  that  membership  implies  adherence 
to  the  labour  party.  B.  An  entrance  fee,  varying 
from  50  c.  at  Jolimont  and  40  c.  at  Brussels,  to  25  c. 
at  Antwerp,  has  to  be  paid,  and  a  share  must  be 
subscribed  for,  these  shares  are  10  fr.  each,  except  at 
Jolimont,  where  they  are  2  fr.,  and  at  Louvain  75c.:  the 
payment  for  them  may  be  made  a  charge  upon  profits,  so 
that  no  cash  need  be  forthcoming,  and  thus  the  poorest 
can  become  co-operators.  C.  Profits  are  divided  into 
three  portions:  i.  Sinking  fund  and  reserve;  2.  Socialistic 
propaganda ;     3.  Dividends   for   the    personnel    and    the 

*  Gide,  op.cit,  pp.  10,  11. 

^  Le  Socialisme  en  Belgique^  Jules  Destrde  et  Emile  Vander- 
velde, 2nd  ed.,  Paris,  18 13,  p.  32. 


300  ATJXILTARIES  OF  SOCIALISM 

members.^  The  proportions  in  which  the  profits  are 
divided  differs  in  the  different  societies,  but  in  all  cases  a 
large  part  is  devoted  to  socialistic  propaganda.  As  an 
example,  "  a  small  society,  that  of  Hautfays,  made  a  net 
profit  of  5 171  fr.  in  1899-1900,  which  was  thus  divided: 
100  fr.  for  the  socialistic  press,  2(X)  fr.  for  anti-militarist 
propaganda  ;  5  per  cent,  to  the  propaganda  in  the  province 
of  Luxembourg,  and  the  balance  to  a  reserve  for  build- 
ing." 2 

Consumers'  co-operative  associations  thus  form  one  of 
the  principal  instruments  of  Belgian  socialism.  Affiliated 
associations  are  founded,  directed,  and  supported  by 
subventions  throughout  the  country,  even  in  the  smallest 
towns  and  in  rural  districts. 

Co-operative  associations  for  production,  other  than 
"bakeries,"  are  regarded  with  indifference,  if  not  with 
contempt,  by  the  Belgian  socialists.  "  These  associations, 
moreover,"  says  Vandervelde, "  play  an  altogether  secondary 
part  in  the  organisation  of  the  labour  party.  The  decisive 
part  belongs  incontestably  to  the  co-operative  association 
of  consumers.  These  are  the  associations  which  supply 
the  labour  party  *  with  the  larger  part  of  its  resources  in 
the  form  of  club  assessments,  subsidies  in  case  of  strikes,* 
subscriptions  in  support  of  the  socialistic  press,  and  other 
propagandist  work."  ^ 

These  socialistic  co-operative  associations  are  covering 
the  whole  of  Belgium  with  a  network  of  affiliated  societies, 
and  the  organisation  is  so  important  and  so  little  known 
outside  Belgium,  that  it  well  deserves  attention.  Co- 
operation here  is  but  the  means,  the  avowed  object  is 
collectivism ;  but  whilst  in  other  countries  co-operation 
is  not  so  deliberately  acknowledged  as  the  auxiliary  of 
socialism,  yet  the  idea  that  it  may  give  moral  or  even 
material  aid  to  the  labour  party  is  gaining  ground  generally. 
Holland  shows  the  nearest  approach  to  the  Belgian  view, 
and  the  English,  although  with  circumspection,  have  taken 
some  steps  in  the  same  direction.     In  France  also,  under 

*  Destr^e  et  Vandervelde,  op.  cit.,  pp.  36-37. 

*  Ibid.^  p.  58.  3  Idid.,  pp.  50-51. 


A  CAUSE  OF  DISCORD  301 

the  guidance  of  Jaures,  an  attempt  has  been  made  to 
utilise  co-operation  in  this  way. 

It  is  a  question  whether  the  enthusiasm  necessary  to 
preserve  the  devotion  of  co-operative  societies  to  collectivist 
ideals  will  continue  indefinitely.  The  difficulties  of  co- 
operation, even  if  it  is  for  consumption  only,  must  be 
enhanced  by  regulations  restricting  the  selection  of 
members  and  of  the  directing  personnel,  and  levies  made 
upon  profits  for  propagandist  purposes  may,  after  a  time, 
be  found  wearisome  by  the  less  zealous  members :  in 
short,  it  appears  probable  that  co-operative  associations 
cannot,  without  grave  risk,  continue  to  place  themselves  at 
the  service  of  socialistic  propaganda  and  socialistic 
ambitions.  In  Belgium,  socialistic  co-operation  has 
brought  about  the  formation  of  the  huge  antagonistic 
societies,  the  "  Associations  Co-operatives  Catholiques."^ 
It  seems  a  pity  that  the  interesting  economical  system  of 
co-operation,  which  ought  to  be  a  means  of  promoting 
union  and  agreement  between  individuals  and  classes, 
should  thus  be  converted  into  a  cause  of  discord  and  a 
weapon  of  war. 

"  Socialisme  r^formiste,"  whilst  seeking  to  avail  itself 
of  the  aid  of  co-operative  associations,  has  recourse  at  the 
same  time  to  other  means  of  preparation  for  the  advent 
of  collectivism,  and  for  securing  in  the  meantime  such 
a  partial  realisation  of  that  system  as  may  be  found 
practicable. 

The  second  part  of  this  party's  programme,  according 
to  Bernstein  and  Millerand  as  well  as  Jaures,  is  to  bring 
about  the  transfer  to  the  state  or  to  municipalities  of  as 
many  industries  as  possible.  The  nationalisation  of 
railways  and  of  petroleum  and  sugar  refineries  is  un- 
ceasingly demanded ;  sometimes  also  of  the  wholesale 
trade  in  grain  and  flour.  The  "  Socialisme  r^formiste,"  as 
well  as  "  Socialisme  collectiviste,"  is  prepared  to  proceed  by 
degrees,  and  by  the  gradual  transference  of  branches  of 
free  industries  to  the  state.     It  has  already  been  demon- 

*  See  "Associations  Co-operatives  Catholiques  en  Belgique,"  by 
Hubert  Valleroux,  in  H Econo7niste  franqais^  vol.  i.,  1892,  pp.  425-29. 


302     OBJECTIONS  TO  STATE  ADMINISTRATION 

strated  that  even  if,  in  a  country  in  which  political  power 
is  concentrated  and  administration  is  highly  disciplined 
and  independent  of  the  electorate,  as  in  Prussia,  some 
industries  may  be  successfully  carried  on  by  the  state,  it 
by  no  means  follows  that  the  result  would  be  the  same  in 
ultra-democratic  countries,  such  as  France,  where  the 
parliament,  which  is  generally  incoherent,  unstable,  extra- 
vagant, tyrannical,  subject  to  private  interests,  and  liable  to 
be  carried  away  by  enthusiasm  and  infatuation,  is  the 
omnipotent  power,  intoxicated  with  its  own  omnipotence. 

These  unstable  democracies  cannot,  without  immense 
peril,  take  upon  themselves  tasks  more  vast  than  those 
which  in  the  course  of  the  nineteenth  century  have  already 
been  imposed  upon  them,  and  of  which  they  acquit  them- 
selves so  poorly.  The  great  services  which  are  naturally 
and  traditionally  administered  by  the  state,  such  as  the 
army  and  navy  and  the  postal  service,  to  which  may  now 
be  added  that  of  public  instruction — afford  striking  object- 
lessons  on  the  defects  of  modern  state  management.^ 

An  administration  placed  in  office  by  popular  suffrage, 
with  a  personnel  which  is  constantly  changing,  has  a 
natural  tendency  to  sacrifice  the  future  to  the  present.  It 
is  tempted,  for  electoral  reasons,  either  to  suppress  sinking 
funds  altogether  or  reduce  them  to  a  minimum,  and  to  be 
guided  by  similar  influences  rather  than  by  technical  con- 
siderations in  the  selection  of  its  staff.  Another  serious 
objection  to  the  state  administration  of  industries  is  the 
difficulty  always  experienced  by  the  public  in  obtaining 
redress  for  injuries  caused  by  the  default  of  its  officials. 

From  the  moral  and  social,  as  well  as  from  the  technical 
and  financial  point  of  view,  it  would  be  a  gigantic  mistake 
to  entrust  the  state  with  new  monopolies,  and  this  is 
equally  true  of  the  municipalisation  of  industries. 

'  See  V^tat  moderne  et  sesfonctions^  P.  Leroy  Beaulieu,  3rd  ed., 
1900. 


CHAPTER   IV 

Municipal  socialism.  Trades-unions.  Progressive  taxation. 
"  Solidarism."  The  "  intellectuals."  The  barriers  of  education. 
The  two  divisions  of  the  new  middle  class.  The  position  of 
officials  under  a  democratic  government.  The  essential  simi- 
larity of  the  aims  of  the  different  schools  of  socialism. 

Municipal  socialism  is  one  of  the  gravest  and  most 
insidious  maladies  which  now  threatens  modern  civilisa- 
tion. During  the  last  twenty-five  years,  it  has  secured  a 
certain  number  of  supporters  amongst  unreflecting 
philanthropists,  and  in  England  it  has  made  considerable 
progress.  In  appearance  it  is  more  benign  than  pure 
collectivism,  of  which,  nevertheless,  it  is  but  one  of  the 
forms.  It  is  a  fortunate  circumstance,  that  in  the  country 
where  it  most  developed,  an  energetic  reaction  has  set  in  ; 
the  English  have  become  alive  to  the  dangers  and  crush- 
ing financial  burdens  caused  by  the  recent  continuous 
increase  of  municipal  services.  The  Times  initiated  a 
determined  campaign  against  municipal  socialism  in  the 
autumn  of  1902,  and  published  a  long  series  of  articles 
upon  the  subject. 

In  some  directions  the  activity  shown  by  British, 
exceeds  that  of  French  municipalities,  but  in  others  it  is 
considerably  less.  Thus,  it  would  be  inaccurate  to  say  that 
the  development  of  French  municipalities,  when  compared 
with  that  of  British,  is  merely  embryonic;  it  is  very 
unusual  for  the  latter  to  own  hospitals,  theatres,  pawn- 
shops, or  even  slaughter-houses  or  laundries,  whilst  all  the 
towns  in  France  of  a  certain  importance  own  such 
establishments ;     they     also     more     frequently     possess 


304    MUNICIPAL  HOSPITALS  AND  SAVINGS  BANKS 

public  parks,  gardens,  libraries,  and  museums.  Again,  a 
large  proportion  of  French  savings  banks  are  municipal. 
The  unwritten  rule,  frequently  neglected,  which  in  France 
has  hitherto  governed  the  class  of  enterprises  undertaken 
by  municipalities,  seems  to  have  been  to  transfer  only 
those  services  of  local  utility  which  either  for  special 
reasons  or  for  reasons  of  general  convenience  are  not 
capable  of  returning  a  revenue,  and  which  in  consequence 
are  not  industrial  in  the  full  sense  of  the  word.  Even 
when  thus  restricted,  municipal  service  is  open  to  serious 
objection.  Hospitals  under  municipal  control,  as  has  been 
seen  during  the  last  ten  years,  have  afforded  opportunities 
for  the  exercise  of  partisan  influence,  greatly  to  the 
detriment  of  their  organisation  and  to  the  welfare  of  the 
sick  ;  their  management  also  shows  great  wastefulness  and 
absence  of  proper  control,  and,  especially  in  towns  in 
which,  owing  to  ancient  foundations,  the  hospitals  are 
richly  endowed,  the  staff  is  unnecessarily  increased  and 
too  highly  paid,  in  order  to  create  sinecures  for  political 
purposes.  Again,  the  fact  that  savings  banks  are  municipal 
institutions  is  a  great  impediment  to  their  reform  ;  their 
administration  being  under  political  direction,  their  funds 
are  occasionally  used  to  assist  the  friends  of  the  munici- 
pality when  in  difficulty,  either  by  loan  on  mortgage  or  by 
the  purchase  of  their  property,  on  terms  which  are  often 
disadvantageous  to  the  banks.  It  would  be  far  preferable 
that  both  hospitals  and  banks  should  be  free  private 
institutions,  unconnected  with  the  municipalities.  The 
best  known  and  most  remarkable  hospitals  in  France, 
those  of  Lyons,  are  entirely  under  private  ownership  and 
administration. 

On  the  other  hand,  many  of  the  English  municipalities, 
under  the  pretext  that  they  are  dealing  with  matters  affecting 
the  public  interest,  have  undertaken  a  number  of  industries, 
such  as  the  supply  of  water  or  gas  and  the  construction 
of  workmen's  dwellings  or  lodging-houses ;  sometimes 
they  go  so  far  as  to  trade  in  certain  commodities,  such  as 
milk  for  infants,  or  even  for  adults,  ice,  and  also  fish,  as 
at  Cardiff.    This  constant  extension  of  municipal  service 


MUNICIPAL  DEBT  305 

has  continued  for  a  long  time,  and  has  been  accepted  by 
the  public,  if  not  with  approval,  at  any  rate  in  silence  and 
with  apparent  indifference.  In  1902,  the  Times^  in  the 
series  of  articles  above  referred  to,  dealt  with  the  question 
of  municipal  socialism,  both  in  theory  and  practice,  with 
great  clearness.  By  reference  to  the  manifestoes  and 
programme  of  the  chief  British  socialist  associations,  such 
as  the  Social  Democratic  Labour  Party  and  the  Fabian 
Society,  it  showed  that  the  capture  of  the  municipalities 
and  the  indefinite  extension  of  municipal  services,  form 
the  basis  of  a  complete  plan  of  campaign,  and  that  the 
municipalisation  of  industries  is  the  forerunner  of  col- 
lectivism. The  programme  is  being  quietly  carried  out,  and 
the  public  pay  but  little  attention  to  it ;  yet  it  is  clear  that 
if  municipalities  are  permitted  to  undertake  all  these 
services,  such  a  network  of  municipal  organisation  will 
be  created,  and  so  great  a  hold  upon  daily  life  will  be 
secured  by  the  municipal  authorities,  that  not  only  freedom 
of  trade  and  industry,  but  personal  liberty,  in  the  widest 
sense  of  the  word,  will  be  in  the  utmost  peril.  In  thus 
attacking  the  system  of  municipal  socialism,  the  Times  is 
the  defender  of  modern  society;  there  can  be  no  doubt 
that  the  capture  of  the  municipalities  by  the  socialists 
would  greatly  facilitate  their  capture  of  the  whole  system 
of  modern  social  organisation. 

With  regard  to  the  practical  application  of  the  system, 
the  Times  refers  to  the  enormous  increase  of  municipal 
debt  and  of  the  rates.  Whilst  between  1874  and  1899, 
the  year  of  the  South  African  war,  the  national  debt  was 
reduced  by  137  millions  sterling,  municipal  indebtedness 
increased  by  183  millions,  and  by  1902  had  risen  to  more 
than  300  millions. 

In  the  last  twenty-five  years,  whilst  the  rateable  value 
has  increased  by  30  per  cent.,  the  local  debt  has  tripled 
itself  The  central  government  has  been  compelled  to 
give  assistance  to  municipalities  out  of  national  funds, 
and  this  contribution,  which  in  1869  was  ;^  17,000,000,  had 
risen  by  1899  to  ;^38,ooo,ooo ;  on  the  other  side,  it  is  said 
that  against  this  enormous   increase  of  debt  and   rates 

U 


306   FINANCIAL  DEFECTS  AND  POLITICAL  VICES 

must  be  set  the  profits  derived  by  municipalities  from  all 
their  various  undertakings  ;  but  if  these  profits  were  con- 
siderable, the  rates  ought,  in  place  of  a  large  increase,  to 
have  shown  a  reduction :  it  has  also  been  demonstrated 
that  the  alleged  profits  in  many,  if  not  in  all  cases,  are 
apparent  rather  than  real.  The  amounts  deducted  from 
gross  profits  for  sinking  fund  are  insufficient,  and  a  strik- 
ing example  of  this  is  given ;  the  municipality  of  Sheffield 
claimed  a  profit  on  the  working  of  their  tramways  of 
;^32,ooo  on  the  last  year's  working,  but  no  provision  had 
been  made  for  sinking  fund  or  depreciation,  and  it  was 
proved  that  ;£^3 5,000  ought  properly  to  have  been  charged 
to  this  account ;  thus  what  was  claimed  as  a  profit  of 
;^32,ooo  was  in  reality  a  loss  of  ;^3000.  Many  instances 
of  waste  and  squandering  are  cited,  and  the  leaning 
towards  extravagance,  which  seems  natural  to  municipal- 
ities with  socialistic  proclivities,  is  made  abundantly  clear. 

In  addition  to  its  liability  to  financial  defects,  municipal 
socialism  is  equally  subject  to  political  vices ;  just  as  in 
the  case  of  the  state,  the  administrative  body  of  a  munici- 
pality is  in  most  cases  merely  a  party  in  power,  anxious  to 
favour  its  supporters  and  to  weaken  and  discourage,  if  not 
to  oppress,  its  opponents ;  the  risk  of  corruption  is  even 
greater  in  a  municipality  than  in  a  central  government. 
Tammany  in  New  York,  and  more  recently  Naples,  in 
1901-2,  afford  striking  examples  of  the  truth  of  this  state- 
ment. In  France,  the  secret  accounts  and  fictitious  orders 
for  payments — which,  according  to  the  "  Procureur-General" 
of  the  Exchequer  (speaking  on  the  3rd  November  1877), 
had  almost  disappeared  from  the  bureaus  of  the  state — 
still  flourish  in  the  administration  of  communes  of  all 
degrees  of  importance. 

From  the  technical  point  of  view,  municipalities  are 
not  only  wanting  in  initiative,  but  are  also  very  slow  in 
adopting  new  methods.  In  1903  Deville,  reporter  of  the 
budget  for  the  town  of  Paris,  made  a  remark  in  his 
report,  which  is  equally  applicable  to  the  state  as  to 
the  municipalities;  in  that  year  (1903)  typewriting 
machines  had  not  yet  been  introduced  into  public  offices. 


SOCIALISTS  AND  ECONOMISTS  307 

although  they  were  in  use  in  many  private  offices,  and  in 
all  American  administrations.  There  were,  he  said,  350 
clerks  in  the  central  town  bureau,  although,  if  typewriters 
were  used,  only  175  would  be  necessary.  It  is  well  known, 
however,  that  no  public  administration,  either  state  or 
local,  has  the  courage  to  make  reductions  in  a  staff  which 
is  unnecessarily  large.  In  the  same  report,  Deville  pro- 
nounced himself  in  favour  of  the  substitution  of  private 
enterprise  for  municipal  control,  upon  the  ground  of 
economy. 

"  Socialisme  r^formiste  "  never  desists  from  the  agitation 
by  which  it  seeks  to  justify  its  existence,  and  has  recourse 
to  many  devices.  Whilst  it  relies  much  upon  co-operative 
associations,  and  upon  the  gradual  extension  of  national 
and  municipal  monopolies,  it  also  strives  to  group  and 
discipline  the  wage-earning  classes,  and  endeavours  to 
absorb  the  trades-unions,  which  it  is  anxious  should  obtain 
the  widest  possible  privileges. 

Bernstein  derives  "  socialism  "  from  the  word  "  socius," 
and  defines  it  as  being  a  movement  towards  association.^ 
If  this  were  so,  socialism  would  differ  but  little  from 
"  economic  liberalism,"  which,  without  holding  that  associa- 
tion could  ever  constitute  the  only  method  of  action, 
assigns  to  it  a  considerable  rdle  and  expects  much  from 
it.  But  association,  as  interpreted  by  socialists,  is  very 
different  from  that  referred  to  and  recommended  by 
economists.  The  former  admits  only  of  association  under 
restrictions,  the  manner  of  grouping  of  members  being 
fixed  by  rule,  whilst  the  latter  only  recognises  and 
approves  of  free  association  in  which  the  grouping  is 
voluntary.  Bernstein  admits,  in  a  restatement  or  correc- 
tion of  his  definition,  that  he  is  "  by  no  means  a  supporter 
of  the  mere  decomposition  of  society  into  free  associa- 
tions."^ This  radical  divergence  of  opinion  between 
socialists  and  economists  appears  very  clearly  in  the 
mission  they  respectively  attribute  to  trades-unions.  To 
the  economists  they  are  spontaneous  organisations  freely 

*  Socialisme  et  Science^  Bernstein,  p.  29,  Paris,  1903. 
2  Ibid.,  p.  54. 


308       THE  TYRANNY  OF  TRADES-UNIONS 

developed,  upon  which  no  special  privileges  ought  to  be 
conferred  ;  every  man  should  be  free  to  join  or  leave  them 
at  will,  and  those  who  desire  to  remain  outside  their 
ranks  should  have  precisely  the  same  rights,  legal  and 
industrial,  as  those  who  are  members  ;  according  to  them, 
different  and  antagonistic  unions  might  exist  in  the  same 
trade,  and  both  would,  in  the  eye  of  the  law,  stand  upon 
an  equal  footing. 

To  the  socialists,  trades-unions  mean  workmen's  legal 
organisations ;  those  who  belong  to  them  are  privileged ; 
there  can  be  no  such  thing  as  dissentient  trades-unions  ; 
one  union  ought  to  include  all  the  workmen  of  one  trade, 
all  those,  at  least,  who  desire  that  their  wishes  and 
interest  should  receive  consideration,  and,  as  was  pro- 
posed by  Millerand  in  the  bill  he  prepared  at  the  time 
of  the  strike  in  1901,  but  did  not  venture  to  present  to 
parliament,  the  majority  of  votes  alone  should  count,  the 
minority  must  submit. 

Thus,  socialists  endeavour  to  exalt  the  trade-union 
into  a  tyrant  endowed  with  privileges  and  armed  with 
power  to  crush  all  resistance  and  triumph  over  all  dissent. 
The  legislation  sought  after  by  the  "  Socialistes  r^formistes," 
and  which  is  the  fourth  point  in  their  programme,  is 
equally  the  object  of  the  revolutionary  socialists,  and  is 
directed  to  the  same  end — namely,  to  bring  about  the 
industrial  supremacy  of  the  wage-earning  class,  and  the 
complete  suppression  of  the  representatives  of  capital. 
Their  object  is  to  create  new  rights  which  would  make 
workmen,  if  not  the  masters  of  the  workshop,  at  least 
the  masters  in  the  workshop,  and  in  cases  of  disagreement 
would  ensure  that  the  employers  should  be  compelled  to 
yield.  By  making  arbitration  compulsory  for  all  industry 
without  exception,  by  insisting  upon  a  minimum  wage, 
upon  pensions,  and  upon  limitation  of  the  hours  of  work 
in  all  those  industries  which  have  to  obtain  a  concession 
from  the  state,  such  as  mines,  railways,  etc.,  a  crowd  of 
little  industrial  republics  would  be  created,  in  which  the 
master  would  be  merely  a  president  deprived  of  effective 
control,  although  remaining  fully  responsible. 


"SOLIDARISM"  309 

The  fifth  object  of  the  "  Socialistes  r^formistes,"  in 
seeking  which  they  have  the  assistance  of  the  radicals  and 
are  also  in  agreement  with  the  revolutionary  socialists,  is  to 
deprive  capitalists,  by  the  agency  of  taxation,  of  a 
continually  increasing  proportion  of  the  profits  they  owe 
to  their  ability  and  to  fortunate  circumstances.  The 
aspirations  of  socialists  have  always  been  for  less  unequal 
conditions,  or  even  for  the  complete  suppression  of 
inequality,  and  pending  the  realisation  of  this  they  would 
endeavour  to  secure  an  approach  to  it  by  progressive 
taxation.  Such  is  the  programme  of  the  "  Socialistes 
reformistes,"  which  they  are  attempting  to  realise  by 
successive  stages ;  their  efforts  are  assisted  by  the 
indifference  and  inertia  of  the  public,  by  the  want  of 
energy,  the  timidity,  and  the  stupidity  of  their  victims, 
and  by  the  co-operation,  whether  conscious  or  not,  of 
the  radical  party. 

The  new  form  of  socialism,  which  is  termed  "  Solidar- 
ism,"  is  even  more  insidious  than  the  "  Socialisme 
reformiste  "  ;  it  differs  from  pure  socialism  only  in  being 
more  benignant  in  tone  and  in  possessing  a  more  com- 
plicated phraseology  ;  but  in  fundamental  character  it  is 
the  same  ;  both  doctrines  advocate  an  artificial  system, 
the  effect  of  which  would  be  to  restrict  individual  enter- 
prise and  to  deprive  it  of  the  larger  part  of  the  reward 
which  is  the  incentive  of  its  action. 

The  originator  of  this  doctrine  is  L6on  Bourgeois,  a 
past-president  of  the  Council  of  Ministers  and  president  of 
the  Chamber  of  Deputies  in  France.  He  described  it  in  a 
work  entitled  Solidariste,  which  reached  a  third  edition 
in  1902,  and  certain  publicists  and  politicians  in  search  of 
some  means  of  reconciliation  between  modern  society 
and  socialism  came  to  his  assistance.  On  all  sides 
"  solidarity  "  was  applauded,  and  an  attempt  was  made  to 
construct  a  social  system  founded  upon  its  doctrines. 
Quite  a  number  of  theorists  formed  themselves  into  a  body 
called  "  L'Ecole  des  hautes  Etudes  sociales,"  and  a  book, 
in  which  a  series  of  conferences  and  discussions  upon  the 
subject  were  summarised,  appeared  in    1902,  under  the 


310  PRE-NATAL  TIES 

title  of  an  Essai  (Tune  philosophie  de  la  Solidarity. 
Widely  different  meanings  are  attributed  to  this  word. 
"  The  solidarist  doctrine,"  according  to  the  article  upon  it 
in  the  new  Grande  EncyclopMie,  "  is  already  certain  as  to 
its  object,  its  methods  of  enquiry,  and  its  ratiocination.  It 
has  constructed  a  scientific  system,  and  laid  the  foundation 
of  a  system  of  justice  and  morality  in  harmony  with 
modern  ideas  and  with  the  aspirations  of  existing 
society." 

What  is  this  system  of  justice  ?  The  founder  of  the 
sect,  L6on  Bourgeois,  describes  it  in  very  indefinite  terms. 
"  When  we  ask  ourselves,"  he  says,  "  what  are  the  con- 
ditions which  are  necessary  for  the  maintenance  of 
equilibrium  in  human  society,  we  are  led  to  recognise 
that  there  is  only  one  word  by  which  they  can  be 
expressed — ^justice."  Few  people  would  contest  this 
proposition, but  what  is  here  meant  hy justice?  Bourgeois 
repudiates  the  idea  that  justice  connotes  liberty,  and 
declares  that  sociology  no  longer  accepts  the  old  idea  of 
personal  freedom.  "  Men,"  he  says,  "  are  necessarily 
bound  together  by  ties  which  are  pre-natal,  and  from  which 
they  cannot  lawfully  free  themselves ;  if  they  were  to  do  so 
they  would  no  longer  have  any  lawful  right  to  exist" 
Thus,  a  man  is  not  a  free  agent ;  he  has  contracted  an 
obligation  by  being  born,  and,  continues  the  founder  of 
solidarism,  "the  true  social  position  of  an  individual 
differs  as  completely  from  that  of  a  man  entirely  free,  as 
from  a  legal  point  of  view  does  the  position  of  one  who 
has  entered  into  no  engagements  with  any  one,  and  who 
acts  in  the  plentitude  of  his  liberty,  from  that  of  a  man 
who  has  entered  into  contracts  and  formed  associations 
with  others  ! "  In  this  medley  of  postulates  and  truisms, 
the  most  flagrant  contradictions  are  to  be  found.^  First 
it  is  stated  that  men  are  bound  by  pre-natal  ties,  and  then  a 
totally  different  idea  is  introduced — that  of  men  who  have 
entered  into  contractual  obligations  with  others  ;  this  is 
merely   a   return    to   the    hackneyed    hypothesis    of    the 

^  See  Im  Solidarity  sociale  et  ses  nouvelles  formuleSy  by  Eugene 
d'Eichthal :  Paris,  Alphonse  Picaxd,  1903. 


DEBTORS  TO  THE  PAST  311 

Contrat  Social  of  Rousseau.  According  to  Bourgeois, 
all  men  are  born  debtors  to  past  humanity ;  "  but  all 
existing  society  has  an  equal  right  to  benefit  by  the 
wealth  accumulated  by  the  labour  of  past  generations. 
If  some  amongst  us,  as  is  actually  the  case,  are  prevented 
from  enjoying  our  share,  whilst  others  benefit  to  an  exces- 
sive extent,  am  I  not  justified  in  declaring  that  there  is  a 
rectification  of  accounts  to  be  made,  that  each  one  is  a 
debtor  or  a  creditor  from  his  birth,  that  his  social  account 
must  be  balanced,  .  .  .  that  some  have  to  surrender,  to 
pay  up,  and  that  others  would  have  to  receive  ?  "  It  would 
be  impossible  to  find  more  defective  ratiocination  than 
that  shown  in  this  quotation.  If  every  one  is  born  a 
debtor  to  past  generations,  how  can  that  endow  any  living 
person  with  a  claim  against  any  other  ?  Then,  on  what  is 
this  supposed  common  right  founded  ?  Society  owes 
infinitely  more  to  individuals  than  they  owe  to  society. 
The  progress  made  by  humanity  has  been  due  to  excep- 
tional individuals  who  have  had  to  struggle,  at  all  events 
at  first,  against  the  want  of  intelligence,  the  mechanical 
routine,  and  the  jealousy  of  their  social  environment ;  how 
can  this  inert  social  mass,  always  antagonistic  to  progress, 
be  regarded  as  a  "  creditor  "  ?  Without  the  bold  initiative 
and  perseverance  of  that  great  company  of  men,  who 
since  the  dawn  of  humanity  have  in  all  ages  successfully 
struggled  against  the  imbecility  and  perversity  of  their 
social  surroundings,  the  human  race  would  still  be  sunk  in 
the  torpid  ignorance  and  misery  of  the  stone  age. 

All  the  sages  have  given  utterance  to  similar  reflections 
upon  the  public  of  their  time.  Is  it  such  a  public  as  this 
that  is  to  be  endowed  with  a  claim  upon  the  men  who  are 
the  only  source  of  human  progress  ?  What  is  this  "  social 
account,"  and  what  is  meant  by  its  rectification  ?  All 
those  who  for  one  reason  or  other,  whether  by  their  own 
fault  or  not,  find  themselves  in  a  disagreeable  position, 
would  be  armed  with  a  claim  against  the  more  energetic 
and  fortunate.  This  supposed  claim,  declared  to  be  a 
positive  and  legal  one,  and  to  be  founded  on  a  quasi- 
contract,  or  upon  contractual  obligations,  is  quite  indefinite, 


312  A  RECTIFICATION  OF  ACCOUNTS 

and  the  amount  of  it  is  to  be  fixed  in  accordance  with  the 
desires  of  the  great  mass  of  the  so-called  disinherited  !  It 
would  be  an  unlimited  obligation  which  could  never  be 
fully  discharged.  It  is  not  here  a  question  of  a  simple 
moral  or  social  duty,  which  would  appeal  to  the  conscience 
of  the  fortunate,  but  of  a  legal  debt,  the  payment  of  which 
society — that  is,  the  majority  of  mankind — may  exact,  under 
conditions  which  have  no  rational  basis.  It  is  not  merely 
the  "  right  to  work  "  and  the  "  right  to  assistance  "  which 
are  claimed  by  this  doctrine ;  the  "  rectification  of  accounts  " 
would  involve  progressive  and  excessive  taxation,  and  in 
practice  it  would  legalise  confiscation.  This  fantastic 
doctrine  is  not  only  the  equivalent  of  socialism,  but  it 
almost  surpasses  it,  and  recalls  the  pretended  "right  of 
recapture  "  invoked  by  anarchists. 

The  solidarists,  however,  endeavour  to  establish  a 
distinction  between  their  doctrine  and  socialism.  Socialism, 
they  say,  has  clearly  enunciated  the  duty  that  society  owes 
towards  its  weaker  members,  and  the  claims  they  have 
upon  society,  but  it  maintains  the  right  to  property  in  its 
present  form,  and  all  that  it  asks  of  society  is  to  cure  the 
evils  caused  by  its  own  organisation.  Justice,  as  inter- 
preted by  L6on  Bourgeois,  is  a  justice  which  atones  and 
restores,  whilst  the  justice  of  socialism  is  the  reorganisa- 
tion of  social  relations.  Socialism  is  prophylactic,  solidarism 
is  therapeutic.^  This  last  phrase  exactly  describes  the 
position,  and  shows  that  notwithstanding  all  attempts  to 
establish  a  distinction,  there  is  a  complete  affinity  between 
solidarism  and  socialism,  since  it  is  only  natural  that  after 
expiation,  organisation  should  follow,  just  as,  when  a  cure 
has  been  effected,  hygienic  precautions  are  taken  to  prevent 
a  relapse.  Thus,  we  see  that  solidarism  leads  necessarily 
to  collectivism. 

For  the  moment,  solidarism  is  satisfied  with  a  restricted 
programme,  and  the  only  legislative  project  brought 
forward  at  the  "  Congr6s  d'^ducation  sociale "  of  the 
solidarists  was  couched  in  terms  so  vague  as  to  include 
everything.  "  The  law  ought  to  exclude  all  inequality  of 
*  D'Eichthal,  op  cit.^  p.  191. 


THE  INTELLECTUALS  313 

social  value  between  contracting  parties.  It  ought  also,  as 
far  as  possible,  to  give  to  the  labour  of  each  one  the 
support  of  the  strength  of  the  community,  and  guarantee 
everyone  against  the  risks  of  common  life."  In  order  to 
give  some  practical  meaning  to  so  vague  a  proposition,  it  is 
added  that :  "  The  method  of  assuring  the  equity  of  social 
contracts  by  the  satisfaction  of  the  social  debt  may  be 
summed  up  in  three  principal  conclusions : — i.  Assurance 
against  defects  of  intellectual  culture.  2.  Assurance 
against  natural  incapacity.  3.  Assurance  against  social 
dangers."  ^  This  is  a  programme  which,  although  extremely 
vague,  has  immense  possibilities  for  practical  application. 

A  certain  number  of  those  who  of  late  years  have  been 
called  the  "  intellectuals  " — persons  of  scientific  or  literary 
attainments,  who,  from  their  manner  of  life,  have  but  little 
positive  knowledge  or  practical  experience  of  social 
questions — have  been  attracted  by  the  doctrine  of  soli- 
darism,  and  have  grouped  themselves  under  its  banner. 

Collectivism  also  makes  a  pressing  appeal  to  intel- 
lectuals, but  to  those  of  a  different  class,  the  "  intellectual 
proletaires  " — that  is,  to  those  men  who  possess  ability  but 
no  capital.  Kautsky  implores  these  men  to  become 
supporters  and  propagandists  of  socialism,  and  declares 
"that  one  of  the  most  important  problems  before  the 
socialist  party,  is  to  discover  some  means  of  gaining 
their  adherence."  He  asserts  that  the  functions  of  the 
privileged  classes,  the  nobility,  and  the  clergy,  of  which 
they  have  been  deprived,  have  become  "  of  more  and  more 
importance,  and  the  number  of  those  who  now  perform 
them  has  increased  year  by  year,  with  the  growth  of  the 
duties  imposed  by  social  evolution  upon  the  state,  upon 

^  At  the  close  of  a  lecture  by  d'Eichthal  in  1903,  at  the  Academy  of 
Moral  and  Political  Science,  an  ardent  solidarist,  M.  Bruno,  an 
inspector  in  the  ministry  of  the  interior,  submitted  a  treatise  in  praise 
of  this  doctrine,  and  claimed  it  as  a  great  sociological  discovery.  A 
dozen  of  the  members  of  the  Academy — philosophers,  historians, 
moralists,  jurisconsults,  as  well  as  economists — spoke  upon  the 
subject,  and  for  various  reasons  were  all  agreed  that  this  doctrine 
possessed  no  scientific  or  experimental  basis  whatever,  and  that  it  was 
no  more  than  a  variety  of  socialism  with  a  decorative  name. 


314  SUPPORTERS  OF  SOCIALISM 

the  communes,  and  upon  science."  The  persons  here 
referred  to  are  public  officials  of  all  grades,  of  whom  a 
large  number  in  modern  democracies  possess  either  no 
capital,  or  very  little.  On  the  other  hand,  he  goes  on, 
"the  capitalist  class  has  begun  to  relieve  itself  of  its 
administrative  functions  in  commerce  and  in  industry,  and 
to  entrust  them  to  employees.  At  the  outset,  these  latter 
were  only  concerned  with  surveillance  and  organisation, 
with  the  purchase  of  the  means  of  production,  and  with 
the  sale  of  the  produce,  duties  which  the  capitalist  could 
not  perform  for  himself  without  special  education  ;  but  a 
consequence  of  the  establishment  of  the  system  of  joint 
stock  companies  has  been  that  the  capitalist  is  altogether 
superfluous. 

"  It  cannot  be  doubted,"  Kautsky  continues,  "  that 
this  system  [the  company  system]  helps  to  increase  the 
number  of  well-paid  employees,  and  of  itself  encourages 
the  formation  of  this  new  middle  class.  When  Bernstein 
describes  those  who  have  a  moderate  income  as  "pro- 
prietors," he  can  certainly  claim  that  the  system  of  joint 
stock  companies  contributes  to  the  increase  of  their 
number,  but  not  by  the  division  of  capital.  The  intel- 
lectuals form  that  class  of  the  population  which  increases 
the  most  rapidly."  i 

Kautsky,  although  his  conception  of  the  respective 
roles  of  capitalists  and  joint  stock  companies  is  inexact 
and  puerile,  is  correct  in  what  he  says  as  to  the  formation  of 
a  new  middle  class,  which  is  constantly  increasing,  by  the 
addition  of  the  employees  of  capitalists  and  of  joint  stock 
companies.  If  the  term  "  proletaires "  is  intended  to 
include  all  those  who,  having  very  little  or  no  capital,  live 
by  their  personal  work,  the  class  of  superior  proletaires, 
which  would  include  officials,  artists,  scientists,  engineers, 
etc,  would  no  doubt  be  enormous,  and  Kautsky  imagines 
that,  since  they  possess  no  capital,  it  would  be  a  matter  of 
indifference  to  them  whether  the  means  of  production 
belonged    to    individuals,   to    joint   stock    companies,  to 

'  Le  Marxisme  et  son  critique  Bernstein^  Karl  Kautsky,  Paris, 
1900,  pp.  242-44. 


«  REACTIONARIES  ^'  316 

municipalities,  or  to  the  state.  He  thinks,  therefore,  that 
the  socialisation  of  the  means  of  production  would  be  well 
received  by  them,  and  that  they  ought  to  range  themselves 
under  the  standard  of  socialism.  In  reality,  however, 
things  would  be  very  different.  Kautsky  himself  recog- 
nises that  the  majority  of  the  intellectual  middle  class 
joins  forces  with  the  "  bourgeoisie,"  and  adopts  and  some- 
times even  exaggerates  its  prejudices.  Is  this  merely  a 
snobbish  desire  to  get  rid  of  all  traces  of  their  proletariat 
origin?  This  may,  indeed,  be  a  frequent  cause  of  the 
aversion  from  socialism  shown  by  these  new  accessions  to 
the  middle  class,  but  Kautsky  suggests  another  and  far 
more  hypothetical  explanation  :  "  The  principal  barrier," 
he  says, "  which  separates  the  new  class  from  the  proletariat 
is  education,  and  they  fear  lest,  owing  to  its  diffusion,  they 
should  lose  this  advantage,"  In  the  Essai  sur  la  reparti- 
tion des  richesses,  it  has  been  shown  that  the  tendency 
of  universal  education  must  be  to  diminish  the  importance 
of  the  middle  classes;  but  it  is  not  suggested  that  they 
would  be  influenced  by  the  barbaric  instincts  Kautsky 
attributes  to  them,  when  he  writes  that  in  countries  where 
popular  education  is  sufficiently  developed  to  threaten  to 
deprive  these  classes  of  their  privileged  position,  the 
extension  of  education  will  be  bitterly  opposed  by  them, 
and  goes  on  to  declare  that  the  intellectuals  would  be 
more  hostile  to  the  educational  progress  necessary  for  the 
improvement  of  modern  production  than  even  the  capital- 
ists ;  that  they  are  the  most  reactionary  of  reactionaries ; 
that  modern  university  professors  and  students  of  science 
are  amongst  those  who  are  opposed  to  the  education  of 
women  and  to  the  admission  of  Jews  to  equal  competition, 
and  that  they  endeavour  to  make  higher  education  as 
expensive  as  possible,  in  order  to  exclude  all  those  who  are 
penniless  from  its  advantages,^  Kautsky's  ideas  upon  the 
subject  appear,  however,  to  be  very  undecided,  and  to 
some  extent  he  modifies  this  grossly  exaggerated  state- 
ment by  the  addition  that,  when  liberal  economists  infer 
the  formation  of  a  new  middle  class  from  the  rapid 
*  Kautsky,  op.  cit.^  p.  248. 


316  THE  NEW  CLASS 

increase  in  the  number  of  intellectuals,  they  forget  that 
as  this  number  increases,  so  also  does  the  share  the 
proletariat  takes  in  it ;  but  between  the  two  sections  of 
intellectuals — those  who  are  supporters  of  capitalism  and 
frankly  hostile  to  the  proletariat,  and  those  who  are  as 
frankly  proletariat — there  is  a  large  body,  neither  pro- 
letariat nor  capitalist,  who  consider  themselves  to  be 
superior  to  this  class  antagonism.^  It  is  to  this  inter- 
mediate class  that  Kautsky  appeals  for  sympathy.  Strum 
and  Eugene  Richter,  he  says,  with  their  theory  of  "the 
patriarchal  employer"  and  the  "doctrine  of  the  Manchester 
school,"  have  no  longer  any  disciples  of  weight  amongst 
the  intellectuals.  The  arraignment  of  capital  and 
sympathy  with  the  proletariat  are  the  fashion,  and  Sir 
William  Harcourt's  dictum,  "  We  are  all  socialists  now,"  is 
becoming  true  of  these  people ;  but  it  is  to  socialism, 
analogous  to  that  defined  by  the  communist  manifesto  of 
1847,  and  not  to  "revolutionary"  socialism,  that  the 
intellectuals  render  their  homage.  In  conclusion,  he 
says  that  though  it  is  but  a  half-hearted  encouragement  of 
militant  socialism  that  can  be  looked  for  from  the  intel- 
lectuals, yet  they  will  not  be  found  amongst  its  most 
determined  opponents.^  This  last  statement  is  strangely 
at  variance  with  the  passage  referred  to  above,  in  which 
he  points  to  a  certain  class  of  intellectuals  as  being 
far  more  hostile  to  the  proletariat  than  the  capitalists 
themselves. 

It  is  worth  while  to  refer  to  these  passages,  both 
because  of  the  importance  of  Kautsky's  position  in  the 
socialist  party,  and  because  he  has  been  the  first  to 
describe  this  new  class  ;  but  there  is  a  regrettable  con- 
fusion in  his  presentation  of  the  subject ;  he  appears  to 
take  no  notice  of  the  fact  that  the  class  he  describes  is 
divided  into  sharply  distinguished  sections  which  are  not 
in  any  way  correlated.  First,  there  are  the  pure  intel- 
lectuals— that  is,  the  litterateurs,  the  scientists,  and  the 
artists — and  towards  the  close  of  his  remarks  Kautsky 
appears  to  refer  to  this  class  only.  It  is  this  class  which 
*  Kautsky,  op.  cit.^  p.  250.  -  Ibid.^  pp.  252-53. 


"OFFICIALS''  317 

is  most  attracted  by  the  recent  varieties  of  socialism,  such, 
for  instance,  as  solidarism.  Experts  of  all  kinds,  notably  the 
pupils  of  the  higher  and  normal  schools,  who  are  neither 
possessors  nor  managers  of  capital,  who  are  conscious  of  a 
feeling  of  contempt,  if  not  of  jealousy,  for  the  wealthy 
classes,  who  are  engrossed  in  abstract  thought,  who  live 
apart  from  contact  with  industry  and  commerce,  who  are 
strangers  to  business,  and  who  find  themselves  sheltered 
from  social  disturbances,  are  frequently  led  by  senti- 
ment as  well  as  thought,  often  also  by  ambition  and 
aspirations,  if  not  to  actual  collectivism,  at  any  rate  to 
socialism  and  solidarism.  Many  men  in  this  class  may  be 
found  who,  whether  influenced  by  interested  or  dis- 
interested motives,  hold  these  opinions,  and  carry  on  an 
active  and  effective  propagandism  in  their  support.  The 
second  division  of  the  new  class  is  composed  of  the  officials 
of  public  or  private  administrations.  The  temperament  of 
these  people  is,  as  a  rule,  more  stable,  and  they  have 
somewhat  more  practical  experience  than  the  pure  intel- 
lectuals. This  is  especially  true  of  the  higher  employees 
in  private  or  joint  stock  administrations,  such  as  engineers 
or  the  managers  of  great  shops ;  these  men,  although  often 
radical  in  politics,  have  far  less  inclination  towards  socialism 
than  the  former  class.  No  doubt  some  advocates  of 
socialism  are  to  be  found  amongst  them,  but  they  are  few 
in  number,  and  their  ranks,  except  when  they  are 
politicians  who  adopt  socialism  as  a  career,  are  recruited 
from  those  who  have  failed  in  their  own  profession.  The 
appeal  of  socialism  to  this  section  of  the  new  middle  class 
is  unsuccessful  for  many  reasons.  In  the  first  place,  the 
dream  of  most  of  these  highly  salaried  officials  is  to 
become  capitalists  themselves,  and  to  bring  up  their 
children  to  a  similar  position  ;  next,  these  men  have  raised 
themselves  by  the  energy  of  their  character,  by  their  habits 
of  order  and  foresight,  and  by  their  sense  of  discipline,  with 
the  concomitant  gift  of  exercising  authority,  whilst  their 
constant  intercourse  with  labourers  makes  them  acquainted 
with  the  defects  of  wage  earners  in  these  respects.  Thus, 
a  social   revolution  which  would   place   the  direction   of 


318    THE  DRAWBACKS  TO  PUBLIC  SERVICE 

industry  in  the  hands  of  the  workmen,  strikes  them  as 
being  not  only  antagonistic  to  their  own  interest  and  to 
that  of  the  community,  but  as  being  contrary  to  nature. 
It  is  suggested  that  such  men  as  these  would  become 
officials  of  the  state,  but  such  a  prospect  does  not  attract 
them.  In  our  democracies  of  conflicting  opinions  and 
violent  passions,  the  official  is  the  slave  of  the  public,  or 
rather  of  the  party  in  power,  and  in  France  especially  this 
servitude  is  extremely  harsh,  and  grows  more  humiliating 
every  day.  The  theoretical  impartiality  ascribed  to 
government  is  a  fiction  opposed  to  nature.  In  reality 
government  is  a  party  in  power,  always  menaced,  always 
restless,  and  always  suspicious  and  defiant.  Everyone 
placed  in  office  by  public  election,  however  wanting  in 
ability  or  character  he  may  be,  is  in  a  position  to  treat  the 
officials  under  him  with  haughty  tyranny,  and  the  central 
government  pitilessly  dismisses  employees,  however 
meritorious  they  may  be,  who  refuse  to  bow  to  the  caprice 
of  these  ignorant  tyrants.  The  fact  that  as  a  rule  hard 
work  is  not  required  from  public  servants,  is  no  doubt 
an  attraction,  but  the  compensating  disadvantage  of  de- 
pendence upon  the  temporary  possessors  of  authority  is 
a  terrible  one ;  and  when  in  addition  to  this,  it  is  remem- 
bered that  promotion  in  public  service  is  not  governed  by 
merit,  but  by  electoral  considerations,  it  is  easy  to  under- 
stand why  really  energetic  and  capable  employees  in 
industry  and  commerce  should  prefer  private  to  state 
employment.  Socialism,  therefore,  is  not  likely  to  gain 
many  recruits  from  this  section  of  the  intellectuals. 

Kautsky  has  written  another  small  book,  published  in 
1903,  under  the  title  Le  lendetnain  de  la  Revolution  soctale, 
which  deserves  notice.  A  translation  of  this  work  has 
appeared  in  Le  Mouvement  socialiste}  a  publication  which 
is  of  special  interest,  since  it  supplies  evidence  of  the 
identity  of  the  actual  programme  of  the  orthodox  Marxists 
with  that  of  "  Socialistes  r^formistes  "  and  the  opportunists. 
Kautsky's  treatment  of  present  and  future  social  problems 
in  this  book,  which  should  rather  be  called  the  eve  than 
^  I  St  and  15th  February  and  ist  March  1903. 


EXTENSION  OF  EDUCATION  319 

the  morrow  of  the  social  revolution,  differs  in  no  way  from 
that  of  the  "  Socialiste  r6formistes,"  or  from  that  adopted 
by  the  radicals.  His  programme  includes  universal 
suffrage  in  all  public  bodies,  complete  liberty  of  the  press 
and  of  public  meetings,  the  separation  of  church  and 
state,  the  abolition  of  all  hereditary  privileges,  communes 
to  be  assisted  to  become  autonomous,  and  the  abolition 
of  militarism,  either  by  arming  the  whole  nation,  or  by 
general  disarmament ;  "  politics  demand  an  army,  financial 
considerations  require  disarmament.  A  national  army 
may,  in  certain  cases,  be  quite  as  expensive  as  a  standing 
army  ;  it  may  be  necessary  for  the  consolidation  of 
the  democracy  to  deprive  the  government  of  the  chief 
force  it  can  use  against  the  nation," 

With  regard  to  the  cost  of  the  army,  it  should  be 
noticed  that  socialism  does  not  promise  the  financial 
relief  expected  by  the  populace,  whilst  as  to  the  unfettered 
right  of  public  meetings,  in  view  of  recent  events  in  France 
and  of  the  opinions  of  socialist  leaders,  it  would  seem 
probable  that  this  privilege  might  be  subjected  to  con- 
siderable restrictions. 

From  the  financial  point  of  view  also,  the  Marxian 
programme  is  the  same  as  that  of  the  pure  radicals,  except 
that  it  is  more  frankly  stated,  and  makes  no  attempt  to 
disguise  the  use  it  would  make  of  taxation,  which,  says 
Kautsky,  the  victorious  proletariat  will  at  once  reform  ;  it 
will  immediately  replace  indirect  taxation,  especially  on 
food,  by  a  progressive  tax  on  incomes  or  even  on  capital, 
and  will  demand  the  means  required  for  carrying  on  the 
state  from  the  possessors  of  great  incomes  or  large 
capital.  The  way  in  which  Kautsky  dwells  upon  this 
point  is  instructive,  and  it  is  evident  that  his  views  differ 
from  those  of  the  radicals  in  France,  and  in  almost  every 
other  country,  only  in  the  greater  precision,  firmness,  and 
honesty  with  which  they  are  stated.  Before  dealing 
thoroughly  with  the  question  of  taxation,  Kautsky  refers 
briefly  to  certain  expenses  which  will  have  to  be  borne 
by  the  victorious  proletariat.  The  chief  of  these  will 
be   an   enormous  extension   of    public   education.     Class 


320  THE  COST  OF  SOCIALISM 

distinctions,  with  all  their  consequences,  he  says,  cannot 
be  made  to  disappear  all  at  once,  but  the  schools,  by 
providing  similar  instruction,  feeding  and  clothing  for  all, 
and  by  affording  equal  opportunities  for  the  development 
of  physical  and  intellectual  aptitudes,  will  prepare  the  way 
for  the  levelling  of  classes.  Bourgeois  radicalism,  he 
writes,  has  already  entertained  the  same  ideas,  but  could 
never  put  them  in  execution,  because  to  do  so  it  would 
be  necessary  to  pay  no  regard  to  wealth,  which  would  be 
an  impossibility  for  the  "  bourgeoisie."  Schools  such  as 
those  described  by  Kautsky,  if  established  throughout  the 
German  empire,  would,  according  to  him,  cost  possibly 
from  ;£'6o,ooo,ooo  to  ;^8o,cx)0,ooo  sterling,  or  double  the 
amount  of  the  war  budget.  "  Such  sums  could  only  be 
spent  on  the  schools  when  public  affairs  are  in  the  hands 
of  a  proletariat  that  is  not  paralysed  by  respect  for  large 
incomes."^  Bearing  in  mind  that  Kautsky  is  not  able 
to  promise  any  reduction  in  the  war  budget,  and  that  he 
proposes  to  abolish  indirect  taxation,  it  is  obvious  that  to 
meet  these  demands  adequately,  the  rich  would  have  to  be 
far  richer  than  they  actually  are,  and  that  it  would  be 
necessary  to  denude  them  of  the  whole  of  their  property 
to  provide  the  necessary  millions.  According  to  the 
Bulletin  de  Statistique  et  de  Legislation  comparie  of  April 
1903,  pp.  624-25,  persons  living  in  Prussia  and  liable  to 
taxation,  who  possessed  a  capital  of  more  than  i  million 
marks  (nearly  ;^5o,ooo),  numbered  6601  in  1902;  of  these, 
791  possessed  over  4  millions  of  marks  (approximately 
;^200,CXX)),  235  more  than  8  millions  (approximately 
;^400,ooo),  and  finally,  7  persons  only,  in  this  country 
so  industrially  active  and  so  enormously  enriched  since 
1870,  possessed  over  40  millions  of  marks  (approximately 
;^2,ooo,ooo),  the  richest  of  all  not  reaching  200  million 
marks  (;^8,0(X),ooo). 

It  would   not  be   possible,  therefore,  to  extort   from 

these   6000    millionaires    the    millions   which    would    be 

required   annually   by   the   victorious   proletariat,  and   it 

would   be   necessary  to  despoil   the  entire   middle  class, 

*  Le  Mouvement  socialiste^  February  1903,  pp.  208-9. 


THE  "MASTER"  IN  THE  WORKSHOP       321 

the  new  as  well  as  the  old,  and  even  to  combine  with  it  a 
large  section  of  the  wage-earning  class  for  purposes  of 
spoliation. 

Besides  education,  another  problem  will  confront  the 
victorious  proletariat — namely,  by  what  method  private 
industry  can  be  made  impracticable,  and  even  forced  to 
request  the  state  to  take  it  over  ?  The  ingenious  descrip- 
tion given  by  Kautsky  of  the  way  in  which  this  task 
might  be  accomplished,  is  the  most  interesting  part  of  the 
curious  picture  he  draws ;  the  system  he  describes  differs 
only  from  that  proposed  by  the  "  Socialistes  r^formistes," 
or  the  radical  socialists,  or  even  by  a  large  number  of 
radicals  pure  and  simple,  in  being  more  strongly  accentu- 
ated !  "  There  is  a  problem  which,  before  all  others,  claims 
the  attention  of  every  proletariat  regime.  At  all  costs,  a 
remedy  must  be  found  for  the  evil  of  unemployment.  We 
do  not  here  seek  to  show  in  what  way  the  problem  of  want 
of  work  can  be  solved.  There  are  many  different  methods, 
and  a  number  of  theorists  have  put  forward  the  most 
diversified  proposals.  The  '  bourgeoisie '  itself  has 
attempted  to  ward  off  the  evils  resulting  from  the  want 
of  work,  and  has  established  schemes  for  insurance 
against  unemployment,  which  have  been  partly  realised. 
But  a  bourgeois  society  can  do  nothing  effectual  in  this 
direction,  because  it  would  be  cutting  off  the  branch  by 
which  it  is  itself  supported.  A  victorious  proletariat  alone 
would  be  in  a  position  to  take  the  necessary  steps — and 
it  would  take  them — to  cause  the  evils  of  unemployment, 
whether  induced  by  sickness  or  by  any  other  cause,  to 
disappear.  In  order  that  men  out  of  work  should  be 
effectually  succoured,  it  is  necessary  that  the  existing 
distribution  of  power  between  the  proletariat  and  the 
'  bourgeoisie,'  and  between  the  proletariat  and  capital, 
should  be  transposed ;  it  is  in  this  way  that  the  proletariat 
will  become  master  in  the  workshop."  These  last  words 
are  significant ;  they  show  that  the  object  is  the  same  as 
that  arrived  at  by  the  "  Socialistes  reformistes,"  and  also, 
consciously  or  unconsciously,  by  a  large  number  of  pure 
radicals — namely,  that  the  proletariat  should  become  the 

X 


322  PURCHASE  OR  CONFISCATION 

master  in  the  workshop ;  but  such  an  arrangement  would 
be  the  starting-point  for  a  rapid  evolution  which  would 
inevitably  lead  to  collectivism.  "  If,"  continues  Kautsky 
imperturbably,  "  the  existence  of  the  workman  is  assured, 
even  in  case  of  want  of  work,  nothing  will  be  more  easy 
for  him  than  to  checkmate  capitalism.  Then  he  would 
have  no  further  need  of  the  capitalist,  who  could  not 
continue  business  without  him.  When  once  this  point  is 
reached,  the  employer  will  always  be  the  loser  in  all 
conflicts  with  his  men,  and  will  be  forced  to  yield.  The 
capitalists,  although  they  might  continue  to  be  directors, 
would  cease  to  be  masters  or  exploiters  of  manufactories ; 
but  when  they  recognised  the  fact  that  only  the  risks  and 
the  expenses  were  to  be  left  to  them,  they  would  be  the 
first  to  relinquish  capitalistic  production,  and  to  insist 
upon  the  purchase  of  their  works,  from  which  they  could 
no  longer  derive  any  profit."  The  first  step  being  granted, 
this  result  would  indeed  be  inevitable ! 

Proprietors  being  reduced  to  this  condition,  Kautsky 
asks  himself  whether  the  state  ought  to  proceed  by 
confiscation  or  by  purchase.  He  hesitates  for  a  moment, 
but  on  reflection  he  grasps  the  fact  that  this  question  is 
one  which  affects  the  coming,  rather  than  the  existing 
generation,  and  soon  arrives  at  the  conclusion  that,  for 
many  reasons,  a  proletariat  regime  would  prefer  to  proceed 
by  the  method  of  purchase,  and  by  indemnifying  the 
expropriated  capitalists  and  landed  proprietors.  But  they 
must  not  rejoice  too  soon.  In  the  first  place,  since  nothing 
but  the  risks  and  expenses  would  be  left  to  manufacturers, 
their  work  might  be  bought  out  at  a  very  low  price; 
next,  it  is  proposed,  by  means  of  a  progressive  tax,  to  get 
back  the  greater  part,  or  the  whole  of  the  purchase  price  ; 
this  is  explained  by  Kautsky  with  commendable  frankness. 
"  As  soon  as  capitalistic  property  has  taken  the  form  of  an 
inscribed  debt,  due  by  the  state,  by  a  commune,  or  by  a 
corporation,  it  will  become  possible  to  impose  a  progressive 
tax  on  income,  on  capital,  and  on  successions  at  a  higher 
rate  than  has  hitherto  been  feasible.  This  would  at  once 
secure    one    of    our    demands    of   to-day — namely,    the 


PROGRESSIVE  TAXATION  323 

substitution   of  a  tax  of  this   nature  for  all  other,  and 
especially  for  indirect  taxation." 

As  society  is  at  present  constituted,  there  are,  as 
Kautsky  remarks,  difficulties  in  the  way  of  progressive  taxa- 
tion. "  The  higher  the  rate,  the  greater  the  temptation  to 
defraud  the  treasury  ;  and  even  if  evasion  could  be  effectu- 
ally stopped,  it  would  not  be  possible  to  go  on  raising  the 
rate  indefinitely,  because  the  over-taxed  capitalists  would 
leave  the  country ;  so  that  even  if  political  power  were  in 
the  hands  of  the  proletariat,  taxation  could  not  be  increased 
beyond  a  certain  limit ;  but  when  all  property  is  in  the 
national  funds,  the  situation  is  altogether  altered  ;  property 
which  to-day  cannot  be  exactly  estimated,  would  then  be 
easily  ascertainable;  it  would  be  sufficient  to  enact  that 
the  names  of  all  fund-holders  must  be  inscribed,  to  make 
it  possible  to  ascertain  the  capital  and  the  income 
belonging  to  each ;  then  the  tax  could  be  increased  at 
will ;  fraud  would  be  impossible,  and  the  tax  could  no 
longer  be  evaded  by  emigration,  since,  as  the  interest 
is  paid  by  the  public  institutions  of  the  country — that  is, 
by  the  state  itself — it  would  be  easy  to  deduct  the  tax 
before  payment;  under  these  circumstances,  the  tax 
could  be  raised  to  any  desired  degree.  In  case  of 
necessity,"  Kautsky  concludes,  "this  increase  of  the  tax 
will  bear  a  strong  resemblance  to  the  confiscation  of 
large  fortunes."  Here  he  foresees  a  possible  objection, 
and  asks :  "  Is  it  not  a  mere  farce  to  attempt  to  disguise 
the  appearance  of  confiscation  by  a  purchase  of  property 
at  the  actual  value,  and  the  recovery  of  the  cost  by  means 
of  taxation  ?  The  difference  between  this  procedure  and 
direct  confiscation  is  only  one  of  form."  Nevertheless, 
whilst  fully  conscious  of  the  end  he  is  aiming  at,  and 
of  the  means  at  his  disposal  for  securing  it,  Kautsky 
rejects  the  idea  of  direct  confiscation,  for  ingenious 
reasons,  which  he  explains,  with  candour  and  with  his 
habitual  precision,  in  the  following  passage : — "  There  is 
a  difference :  direct  confiscation  hits  every  one  equally — 
those  suffering  from  industrial  disability  as  well  as  the 
active  workers,  the  small  as  well  as  the  great ;  with  this 


324         "PRODUCTION"  THE  DIFFICULTY 

method  it  is  difficult,  often  impossible,  to  distinguish 
between  large  and  small  incomes,  both  the  former  and 
the  latter  being  frequently  derived  from  the  same  financial 
undertakings.  Direct  confiscation  would  act  suddenly,  at 
a  blow,  whilst  confiscation  by  taxation  would  allow  of  the 
abolition  of  capitalistic  property  by  a  slow  process,  the 
rate  of  which  might  be  accelerated  in  proportion  to  the 
consolidation  and  success  of  the  new  organisation.  It 
would  be  possible  to  spread  this  confiscation  over  tens  of 
years,  so  that  it  would  only  reach  its  full  efficiency  when 
another  generation  had  grown  up  under  the  new  system, 
which  would  have  learnt  no  longer  to  rely  upon  capital 
and  interest. 

Confiscation  would  thus  lose  all  its  painful  character ; 
people  would  become  habituated  to  it,  and  it  would  seem 
to  be  less  grievous.  The  more  pacifically  the  conquest  of 
political  power  by  the  proletariat  is  effected,  the  more 
solidly  this  power  would  be  organised,  the  more  en- 
lightened it  would  be,  and  the  more  allowable  it  would 
be  to  hope  that  the  refined  method  of  progressive  taxa- 
tion would  be  preferred  to  the  more  primitive  plan  of 
confiscation."  Thus  writes  the  chief  of  the  orthodox 
Marxists.  He  is  certain  of  the  efficacy  of  his  method,  and, 
in  truth,  no  defect  can  be  found  in  it ;  the  weapon  it  pro- 
vides— progressive  taxation — is  of  sovereign  efficacy,  and, 
in  the  course  of  some  decades  of  years,  would  undoubtedly 
accomplish  its  task — namely,  the  dispossession  of  capitalists 
great  and  small.  Kautsky  ends  this  chapter  with  these 
words  :  "  The  expropriation  of  the  means  of  production 
is,  relatively  speaking,  the  simplest  of  the  great  changes 
involved  by  social  revolution.  To  effect  it,  it  is  enough 
to  possess  the  necessary  power,  and  the  possession  of  this 
power  is  the  hypothesis  upon  which  this  system  is  entirely 
based.  The  difficulties  of  the  proletarian  regime  do  not 
lie  in  the  domain  of  property,  but  in  that  of  production."  ^ 
In  this  Kautsky  is  obviously  right ;  the  difficulties  of 
production  under  a  collectivist  or  proletarian  rigime  have 
been  pointed  out  in  this  book,  and  need  not  be  repeated. 
^  Le  Mouvetnent  socialistey  ist  February  1903,  pp.  215-20. 


IF  NOT  TOO  LATE !  325 

The  diflficulty,  however,  which  confronts  collectivism  in 
this  direction  is  insuperable. 

The  methods  proposed  for  accomplishing  the  social 
revolution  by  the  orthodox  Marxists,  as  described  by 
their  leader,  have  been  shown  to  be  identical  with  those 
of  the  "  Socialistes  r^formistes,"  the  "  Socialist  Radicals," 
and  even  the  pure  "  Radicals " ;  the  instruments  by 
means  of  which  the  transformation  is  to  be  effected 
are — first,  working-class  legislation,  with  a  system  of 
subventions  and  arbitrations  between  master  and  man, 
which  would  have  the  effect,  in  Kautsky's  words,  of 
making  "  the  proletariat  the  master  in  the  workshops ; " 
and  secondly,  progressive  taxation.  If  there  are  any 
persons  who  still  think  it  might  be  possible  in  practice 
to  place  a  limit  upon  the  amount  of  taxation,  or  even 
upon  working-class  legislation,  they  ought  to  be  dis- 
illusioned by  the  clear  and  logical  statements  of  Kautsky 
Consciously  or  unconsciously,  all  these  parties  with 
different  names  are  working  in  alliance  for  the  advent  of  col- 
lectivism ;  there  is  no  substantial  difference  between  them  ; 
the  doctrines  advocated  by  the  "Socialistes  r^formistes," 
the  "  Social  Radicals,"  or  the  pure  "Radicals,"  are  as  great 
a  menace  to  society  as  those  of  the  most  resolute  disciples 
of  Marx.  The  old  Marxian  doctrine  of  the  sudden  de- 
struction of  capitalistic  society,  is  a  danger  to  humanity 
far  less  threatening  than  class  legislation  for  the  benefit 
of  the  proletariat,  coupled  with  a  system  of  progressive 
taxation  initiated  with  deceptive  moderation.  If  once 
these  steps  are  taken,  the  only  chance  that  will  remain 
of  escaping  from  the  collectivism  which  is  the  certain 
end  of  the  evolution  thus  commenced,  is  that  the  social 
disasters,  the  wide-spread  affliction,  and  general  dis- 
content which  would  inevitably  ensue,  would  produce 
a  salutary  reaction.     If  only  it  is  not  too  late ! 


CONCLUSION 

It  seems  hardly  necessary  to  define  the  conclusion  to 
which  we  are  led  by  the  foregoing  account  of  the  develop- 
ment, more  apparent  than  real,  of  the  doctrine  of  col- 
lectivism since  1895  J  but  it  may  be  worth  while  to 
describe  shortly  the  position  of  humanity  under  the 
proposed  regime. 

It  has  been  shown  that  there  is  no  real  difference 
between  the  various  sects  of  socialists,  whether  they  call 
themselves  "  Socialistes  r^formistes,"  *'  Solidaristes,"  or 
"  Collectivists. "  Complete  collectivism  is  the  ideal  which, 
consciously  or  unconsciously,  they  all  pursue.  Some  would 
advance  rapidly  and  directly,  others  would  follow  a  less 
direct  course,  which,  however,  would  affect  but  little  the 
distance  to  be  traversed  or  the  real  rate  of  approach. 
Under  the  proposed  regime,  individual  liberty  and  dignity 
must  disappear,  either  abruptly,  as  proposed  by  the  Marx- 
ists, or  gradually,  as  proposed  by  the  "  Socialistes  r^form- 
istes "  and  the  "  Solidaristes."  It  is  astonishing  to 
see  the  number  of  socialist  publications  which  actually 
claim  that  their  regime  would  secure  the  development  of 
individual  liberty  and  dignity !  How  could  liberty  exist 
in  a  society  in  which  everyone  would  be  an  employee  of 
the  state  brigaded  in  squadrons  from  which  there  would  be 
no  escape,  dependent  upon  a  system  of  official  classifica- 
tion for  promotion,  and  for  all  the  amenities  of  life  !  Even 
now,  the  commands  issued  by  ministers,  especially  at 
election  time,  and  the  arbitrary  dismissals  of  employees, 

constitute  an  eloquent  commentary  upon  the  liberty  and 
S2e 


CHARITY  WOULD  VANISH  327 

dignity  of  state  employees ;  and   this   subjection   of  the 
individual  to  those  in  authority  would  be  greatly  increased 
if  the  competition  of  private  administration  were  abolished. 
The  employee  (and  all  will  be  employees)  would  be  the 
slave,  not  of  the  state,  which  is  merely  an  abstraction,  but 
of  the  politicians  who  possessed  themselves  of  power.     A 
heavy  yoke  would  be  imposed  upon  all,  and  since  no  free 
printing   presses  would   exist,  it  would  be  impossible  to 
obtain  publicity  for  criticism  or  for  grievances  without  the 
consent  of  the  government.     The  press  censure  exercised 
in  Russia  would  be  liberty  itself  compared  to  that  which 
would  be   the  inevitable   accompaniment  of  collectivism. 
However  numerous  the  dissentients,  they  would  be  con- 
demned to  silence  and  subjected  to  injustice  under  this 
regime;  and  a  tyranny  such  as  has  never  been  hitherto 
experienced,  would  close  all  mouths  and  bend  all  necks. 
Again,  what  dignity  could  exist  in  a  society  when  state 
obligations   would   be   substituted    for   all   moral   duties? 
Parents  would  no  longer  direct  the  bringing  up  of  their 
children,    for    whom     they    would     not     be    responsible, 
and   for   whom    they    would    no    longer    be    called  upon 
to  make   sacrifices,  and  in  their   turn   children  would  no 
longer  assist  their  aged  parents.     The  honour  and  happi- 
ness of  family  ties,  braced  by  common  effort,  by  dangers 
encountered  with  mutual  devotion,  and  by  successes  and 
misfortunes,  would  cease  to  exist.     Despised  and  exposed 
to   state  competition,  then   persecuted   by  contemptuous 
and  arrogant  public  doles,  personal  charity  would  shrink, 
fade,  and  finally  vanish.     No  one  would  any  longer  have 
responsibilities    or    duties    towards    his    fellows ;    savage 
egotism   would  reign,   and  the   effect   of  socialism,   para- 
doxical   as   it   seems,    would    be   to   establish   the    most 
ferocious    individualism.     The    phrase  which    Lassalle  so 
falsely  applied  to  existing  society,  "  the  ties  of  humanity  no 
longer  exist  between  human  beings,"  would  be  actually 
true  of  this  new  society,  and  enforced  "  solidarity  "  would 
eliminate  all  spontaneous  sympathy. 

How  could  human  progress  continue  in  a  society  subject 
to  universal  constraint  and  authority  ?     Authority,  what- 


328  THE  FUTURE  OF  HUMANITY 

ever  its  source,  is  always  slow,  pedantic,  and  a  slave  to 
routine ;  when  derived  from  a  democracy,  these  defects 
would  be  exaggerated  ;  an  immense  bureaucracy  would  be 
established,  and  individuals  who  are  exceptional  in  any 
way  would  be  shouldered  on  one  side  and  crushed  by  its 
complicated  machinery.  If  the  circumstances  under  which 
humanity  has  progressed  are  examined,  it  will  be  found 
that  advance  has  depended  upon  the  coexistence  of  three 
conditions :  the  provision  of  facilities  for  individuals  of 
exceptional  ability ;  liberty  of  association,  which  would 
allow  of  the  co-operation  of  energetic  men  and  the  free 
development  of  their  projects ;  and  finally,  abundant  pro- 
duction and  the  free  and  rapid  circulation  of  the  capital 
which  supplies  the  means  for  the  practical  application  of 
discoveries  and  scientific  inventions. 

It  is  the  incessant  improvement  of  methods  of  pro- 
duction which  has  made  it  possible  to  shorten  the  hours  of 
labour  and  to  minimise  the  unpleasantness  of  repugnant 
or  dangerous  work.  It  is  by  this  means  also,  that  produc- 
tion will  in  the  future  increase  so  largely,  that  the  least 
fortunate  of  men  will  share  advantages  now  enjoyed  by  the 
wealthy  only,  as  well  as  many  additional  amenities  as  yet 
unknown.  This  brilliant  future  for  humanity  now  appears 
to  be  a  certainty,  provided  only  that  conditions  favourable 
to  the  rapid  development  and  economic  application  of 
scientific  discoveries  are  maintained.  But  for  their  con- 
tinued existence,  these  conditions  demand  a  free  and  elastic 
social  system,  unfettered  by  official  regulations  and  the 
paralysing  control  of  bureaucracy.  These  conditions  have 
been  present  throughout  in  the  social  organisation  which 
since  the  close  of  the  eighteenth  century  has  been  estab- 
lished by  the  principal  civilised  races,  but  collectivism 
would  be  altogether  hostile  to  their  continuance ;  under  its 
regime  exceptional  individuals  would  be  crushed,  and  no 
one  would  any  longer  have  a  personal  interest  in  progress. 
Again,  with  regard  to  the  capitalisation  of  savings,  which  is 
so  indispensable  for  the  realisation  of  improvements :  at 
the- present  time  it  is  abundant,  but  it  is  due  to  a  minority 
of  individuals  only ;  under  a  collectivist  regime  it  would  be 


THE  EFFECT  OF  COLLECTIVISM  329 

the  majority  who  would  determine  how  much  of  the 
national  produce  should  be  set  aside  from  the  amount  used 
for  immediate  or  prospective  gratification,  and  devoted  to 
saving  or  capitalisation ;  there  can  be  little  doubt  that  this 
portion  will  always  be  infinitely  less  than  that  now  created 
by  the  efforts  of  free  men  urged  by  personal  or  family 
interest.  To  a  far  greater  extent,  therefore,  than  now,  the 
capital  required  for  improvements  will  be  wanting,  and  at 
the  same  time  the  energy  that  makes  for  progress  would 
itself  be  withering  away.  Thus,  collectivism  implies  a 
prodigious  loss,  both  to  the  individual  man  and  to  civilisa- 
tion in  general.  At  first  a  slackening  of  economic 
enterprise,  then  its  complete  cessation,  soon  to  be  followed 
by  retrogression ;  these  would  be  the  inevitable  conse- 
quences for  humanity,  or  for  any  section  of  humanity  that 
adopted  this  regime.  In  the  course  of  two  or  three  genera- 
tions only,  the  material  impoverishment  and  moral 
weakening  of  humanity  would  be  considerable ;  in  a 
century  the  face  of  the  world  would  be  entirely  changed ; 
not  only  would  all  improvement  in  production  have  ceased, 
but  even  the  technical  arts  already  acquired  would  have 
deteriorated,  owing  to  the  want  of  personal  interest  in  the 
practice  of  them,  and  humanity  would  soon  revert  to  the 
ignorance,  indolence,  and  poverty  of  primitive  ages.  All 
these  social  evils,  but  slightly  delayed,  would  be  engendered 
with  equal  certainty  by  the  "Socialisme  reformiste"^  or 
"  Solidarisme,"  since  logically  and  of  necessity  they  are 
but  the  precursors  of  collectivism. 

^  [Represented  in  England  by  the  Fabian  Society.] 


MEKCANhLELibrtAR^r: 
NEW  YORK. 


INDEX 


Analogy  between  the  functions  of 

the  social  and  those   of  the 

human  body,  156 
Arbitration,  compulsory  industrial, 

308 
Art  under  a  coUectivist  regime^  167 
Assington,  agricultural  association 

at,  67 
Associations,  agrarian,  67-68 

industrial,  for  production,  1 1 
Australia,  21 
Austria,  the  *'  Staatsbahn  "  of,  86 


B 


Baltzer,  the  vegetarian,  167 
Barter,  international,  210 
Bebel,  Kautsky,  and  Guesde  almost 
the  only  avowed  supporters  of 
pure  Marxism,  275 
Belgium,  co-operative  societies  in, 
299 
socialism  in,  245 
Bernstein    intellectual    legatee    of 
Engels,  246 
a  critic  of  Marxism,  246  et  seq. 
description  of  his  book,  Social- 
isme  thtforique,  etc.,  248  etseq. 
the      economic      evolution      of 

modem  society,  249,  253 
the  Marxian  theory  of  value,  250 
"plus-value,"  250 
"shares"  as  "dynamic  capital," 

254 
conclusion  upon   Marx'    theory, 
258 

881 


Bernstein — the  evolution  of  modem 
commerce,  and  increased 
production  tends  to  diminish 
the  effect  of  economic  crises, 
264 
the  use  of  the  term  "  scientific " 

as  applied  to  socialism,  265 
bases  his  hopes  on  co-operation, 
and  recommends  municipal 
socialism,  269 
Socialisme  et  Science,  269 
iron  law  of  wages,  269 
meaning  of  scientific  socialism, 

270 
theory  of  pauperisation,  270 
can    find    nothing    "  scientific " 

about  socialism,  271 
why  socialism  is  not  and  cannot 

be  a  pure  science,  272 
theoretical  socialism  is  tending  to 

disappear,  276 
policy  of   a    slow  approach    to 

collectivism,  278 
co-operative  association,  292 
derivation  of  the  word  "social- 
ism," 307 
Blanc,  Louis — the  law  of  distribu- 
tion, 189 
tailors'  association  in  1848,  181 
Blanqui,  the  elder — introduction  of 

machinery,  268 
Blanquists,  the  conception  of  the, 

249 
Bordeaux,  congress  at,  280 
Bourgeois,  alliance  with,  party,  286 
the,     element     in     co-operative 
societies,  295 
Bourgeois,  L6on,and'*  Solidarism," 
309 


332 


INDEX 


"  Bourgeoisie,"  the,  and  unemploy- 
ment, 321 
Brian t,  Aristide,  281 
Briosne  on  the  relations  of  land- 
lords and  tenants,  109-10,  125 
Bruno,  treatise  in  praise  of  "solidar- 

ism,"  313 
Buckle  on  individual  action,  158 
Bureaucracy,  immense  size  of,  re- 
quired   under    a    coUectivist 
regime,  162 
no,  however  large,  could  organise 
national  production  and  dis- 
tribution successfully,  164 
Business,  proportion  of  persons  suc- 
cessful in,  in  France,  120 
means   the   exploitation  of  the 
workman,  130 


Canada,  allocations  of  land  in,  22 
Capital  not  the  object  of  attack,  14 

origin  and  evolution  of,  16 

is  the  plus-value  of  labour,  19 

the,  sunk  in  the  land,  5,  20 

concentration  of,  15,  252 

is  the  result  of  thrift,  97 

has  not  always  existed,  99 

has  existed  from  the  remotest 
antiquity,  117 

additions  to,  appear  first  in  the 
form  of  money,  118 

"variable,"  125 

"constant"  or  "fixed,"  125 

"  constant,"  cannot  produce 
"plus-value"  or  profit,  126 

alone  profits  by  improvements 
in  machinery,  132 

the  guardian  and  protector  of 
wage  earners,  145 

increased  diffusion  of,  a  cause  of 
the  over-stocking  in  distribu- 
tive and  professional  occupa- 
tions, 219 

"magnates"  of^  255 

effect  of  the  division  of,  by  the 
agency  of  joint  stock  com- 
panies, 255 

statistics  of  owners  of,  in  Prussia, 
320 


Capitalisation  of  savings,  105 
Capitalism,  definition  of,  14 

"  liberalism  not,  is  the  antithesis 
of  socialism,"  268 
Capitalist,  the  initiator  of  work,  124 
is  the  personification  of  "  capi- 
tal," 130 
function  of  the,  in  modem  indus- 
try, 131 
ready  to  incur  risks,  183 
the,  class  has  begun  to  relieve 
itself  of  administrative  func- 
tions, 314 
Capitalistic  society,  distinguishing 

characteristic  of,  119 
Census  of  1881  and  the  production 
of  luxuries,  226,  228,  229,  230, 
231,  232 
German,  of  1895,  233 
French,  of  1896,  and  the  size  of 
establishments,  259  et  seq. 
"  Chance  "  is  an  important  element 

in  human  affairs,  27  et  seq. 
Cheques,  labour-,  200-1 
labour-,  a  safeguard  against    a 
reversion      to      social      in- 
equalities, 204 
labour-  and  usury,  204 
Christianity  ignored  by  Marx  as  a 
factor  in  human  development, 
248 
Cities,  continued  prosperity  of,  82 
Coke  of  Norfolk,  83-84 
Colajanni,  Napoleone,  281 
Collectivism,    the    negative    and 
positive  side  of,  10 
and  joint  stock  companies,  16 
two  theories  of,  33 
agrarian,  60 

expedients  hostile  to  spirit  of,  182 
unable  to  provide  a  satisfactory 

system  of  production,  185 
an   agency  for  distribution,  185 

et  seq. 
less  efficient  in  securing  increase 
of  national  wealth  than  the 
existing  system,  189 
the  aged  imder,  203 
would  offer  many  openings   for 
the  re-establishment  of  social 
inequality,  204 
similar  to  a  military  regime,  208 
would  jiKtify  the  spoliation    of 
the  wealthy,  212 


INDEX 


333 


Collectivism  condemned  by  history 
and  common  sense,  241 
makes  an  appeal  to  the  intel- 
lectual proletariat,  313 
CoUectivists,  plagiarisms  by,  from 

existing  social  system,  182 
Commerce,  definition  of,  by  Marx, 
118 
has  taken  the  place  of  barter, 

121 
private,    alone    can    guarantee 
continuance    of    liberty    of 
choice  of  requirements,  165 
reappearance  of  private,  205 
Commodities,    circulation    of,    the 
starting-point  of  capital,  n6 
exchange  of,  119 
more  elaborate,  demanded,  262 
Communism,  definition  of,  4 
collectivism    would    necessarily 
end  in,  201 
Companies,  joint  stock,  differ   in 
kind,  and  not  only  in  degree, 
from  state  administration,  178 
joint  stock,  encourage  the  forma- 
tion of  a  new  middle  class. 

Competition,  can  collectivism  pro- 
vide a  substitute  for  ?  30 
the  cause  of  reduction  of  prices, 

133 
substitution  of  harmonious    co- 
operation for  the   inhuman 
action  of  unrestrained,  156 
between  employers  a  safeguard 

against  various  abuses,  208 
anarchic,  217 
ultimate  effect  of,  217 
"  Congress   d'Education   Sociale," 

312 
Control,  committees  of,  of  national 

production,  160 
Co-operation — co-operativeassocia- 
tions    and    the     "  Socialisme 
reformiste,"  290 
"equality"    incompatible    with, 

for  production,  292 
condemnation    of,    for    produc- 
tion,  is  tantamount  to   the 
condemnation        of         the 
whole  theory  of  collectivism, 

293 
first     notable    example     of,    of 
consumers,  294 


Co-operation  —  Army    and    Navy 
and    Civil    Service    Societies, 

295    .  . 

Co-operative  societies,  agricultural, 
67  et  seq. 
have  rendered  invaluable  services 

to  society,  217 
for  production  at  first  approved 

by  socialists,  290 
affiliation   of  small,  for  produc- 
tion, to  a  parent  society,  296 
in  Belgium,  299 
"  Corvee,"  the,  wo  et  seq. 
Cost,  reduction  of  net,  133 
Cremieux  an  advocate  of  restricted 

succession,  76 
Crises,  economic,  are  most  severe 
in  countries  in  which  industry 
is  "non-capitalistic,"  265 
Crusoe,  Robinson,  99 
and  "capital,"  116 
and  the  claim  for    interest    on 
capital,  125 
Currency,  in  the    shape  of   coin, 
iq8 


D 


Darwin,  Charles,  157 
Debbs,  Eugene  V.,  281 
Debtors,  men  are,  to  past  genera- 
tions, 311 
Delitzsch,    Schulze    de,    and    co- 
operation, 181 
Democracy — a  democratic   organ- 
isation of    society    the    most 
favourable    condition    for  ac- 
cumulation of  wealth  by  pro- 
fessional men,  204 
effect  of  the  novelty  of  a  demo- 
cratic n'gtme,  219 
Denain,  meeting  at,  279 
Deville  and  municipal  trading   in 

Paris,  306 
"Dime,"  no  et  seq. 
Distribution,     excessive     numbers 
engaged  in,  and  the  remedy, 
218 
directors  of,  161 
law  for  the  regulation  of,  189 
the  weakest  point  in  the  proposed 

system  of,  189 
no  law  of,  discoverable,  190 


334 


INDEX 


Division  of  labour,  the  only  source 

of  wealth,  106-7 
Domicile,  freedom  of  choice  of,  207, 

240 


Economic,  the  existing,  organisa- 
tion, 8 
the,  organisation  of  the  middle 

ages,  15 
can  equal,  productivity  be  main- 
tained   under    collectivism  ? 

Economy,  in  production  secured  by 
collectivism,  214 
effected  by  socialised  labour  ap- 
propriated by  capitalists,  132 
Education,     present     commercial 
value  of  elementary,  218 
extension    of,    bitterly    opposed 

by  the  intellectuals,  315 
extension    of,    under    socialism, 

319 
cost  of,  under  socialism,  320 
Eichthal,  d',  lecture  by,  313 
Engels — relations  with   Bernstein, 
246 
recognition  of  errors  committed 
by   Marx  and  himself  with 
respect     to     prophecies    of 
social  revolution,  249 
on  Marx'  sources  of  information, 

266 
and  the  "  Socialisme  reformiste," 
288 
Enterprise,  result  of  suppression  of 

private,  166 
Environment,  the  social,  311 
Equality,  material  and  moral,  219 
Exchange  has  become  a  profession, 

121 
Expropriation      of     landed     pro- 
prietors, 66 


Fabian  Society,  281 

aims  of  the,  285 
Factories,    large,   the    creators  of 

small  auxiliary  industries,  262 
Factory  inspectors,  reports  of,  and 

the  concentration  of  capital,  256 


Family  work  and  collective  earn- 
ings, 137 
Fashion,  Kautsky  upon  the  aboli- 
tion of,  237 
effect  of,  on  protection,  237 
changes  in,  affect  only  a  small 

number  of  people,  239 
a  taste  for,  allied    to    faculties" 
which  are  essential  to  the 
progress  of  humanity,  239 
extravagance     induced    by,    in- 
significant, 239-40 
intimate  connection  of,  with  per- 
sonal freedom,  240 
Faucher,     L6on — introduction     of 

machinery,  268 
Fawcett,  Henry,  on  the  state  pur- 
chase of  land,  71 
Fengueray,  181 
Ferri,  Enrico,  281 
Feudal     rights,     abolition     of,    in 

France,  20 
Finisterre — economic  crisis  owing 
to  disappearance  of  sardines, 
265 
Flanders,  production  of  wheat  in,  1 92 
Foreign,  relations  of  a  collectivist 
country,  209 
exchanges,  the  value  of,  211 
stock  markets  at  times  of  crisis, 
211 
Fourier,  183 
Franco-Belgian  school  of  socialists, 

6 
Freedom,  individual,  13 
substitution  of  official  regulation 

for,  168 
disappearance  of  professional,  183 


Galiani,  157 

George,    Henry,    and    "unearned 
increment,"  26,  27 
admits  right  of  private  owners  to 
indemnity,  71 
Germany  and    the  production    of 

luxuries,  233 
Gide,   Charles — scheme   for    state 
purchase  of  land,  72-74 
tendency  of  associations  of  pro- 
ducers is  towards  oligarchy, 
293 


INDEX 


335 


Gide,     Charles  —  associations     of 

producers  would  bring  about 

industrial  anarchy,  294 

exposition  of  the    evolution    of 

co-operative  societies,  297-98 

Gififen,  Sir  Robert — distribution  of 
income,  24,  note 

Guesde,  Jules,  a  faithful  follower  of 
Marx,  272,  280 

Gurdon,  J. — co-operative  land  asso- 
ciation, 67 


H 


Harcourt,  Sir  William,  316 
Hegel,  period  of  ascendency  of  his 

ideas,  249 
Holkham,  estate  of,  83-84  note 
Holland  and  co-operative  societies, 

300 
Hyndman,  H.  M.,  281 

summary  of  results   of  enquiry 
made  by  Renard,  280,  287 


I 


Immigration,  attitude  of  a  coUec- 
tivist  government  towards,  212 

Income,  distribution    of   national, 
23-24 
in  Prussia  and  Saxony,  252-53 

Increment,  "unearned,"  80 

Indemnity  for  owners  of  land,  70- 

76  .      .    . 

Individual   initiative,   the   import- 
ance of,  159-62 
Individuality,  destruction  of,  208 
Individuals,  progress  of  humanity 

due  to  exceptional,  311 
Industrial  improvements,  socialisa- 
tion of,  128 
Industries,  home,  138 
upon    a    large  scale  a  defence 
against    the    evils    of    un- 
employment, 151 
small,  and  the  concentration  of 

capital,  261 
no  present  indication  of  the  dis- 
appearance of  the  smaller, 
262 
Industry,  chaotic  period  of,  266 


Inequality.    See  Social 
Inheritance,    under    a    coUectivist 

regime,  203 
as    restricted    by     collectivism 
would  be  a  source  of  cor- 
ruption, 204 
Inheritors,     idle,     spendthrift,     or 

vicious,  203 
Intellectuals     are     divided     into 

sharply  defined  classes,  316 
International  relations,  collectivism 

would  be  unable  to  establish 

satisfactory,  213 
Inventors  and  the  red-tapism  of 

bureaucracy,  184 
Iron  law,  the,  of  Lassalle,  and  the 

organisation  of  industry,   123, 

124 


J 


Jagetzow,  Robertus,  the  true  father 

of  collectivism,  246  et  seq. 
Jaures  a  socialiste  transigeant,  272 
Etudes  soctalistes,  272  et  seq. 
and  the  method  of  progressive 
absorption  of  power,  273 
ideal  is  communism,  274 
views  on  socialism,  279 
Java,  state  cultivation  in,  84-85 
Justice,    as    interpreted    by    Leon 
Bourgeois,  310 


K 


Kapttaly  Das,  "  the  critical  evangel 
of   the    European    workman," 
10 
description  of  contents  of,  116 
Kautsky,  on  fashion,  237 
on    the    waste    caused    by    the 

growth  of  large  cities,  238 
on  capitalistic  production,  238 
collaborator  with  Bernstein,  246 
P.  Leroy  Beaulieu  the  "  bourgeois 

optimist,"  247 
testifies  to  the   purity  of  Bern- 
stein's doctrine,  247 
on  the  position  of  British  work- 
men, 267 
is  it  "  socialism  "  or  "  capitalism  " 
that  is  abolishing  itself?  26S 


336 


INDEX 


Kautsky,  appeal  to  the  intellectual 
proletariat,  313 
Le  lendemain  de  la  Rhjolution 

sociale,  318 
and  taxation,  319 
and  education,  319-20 
and  unemployment,  321 
and  the   suppression   of  private 

industry,  321 
confiscation  or  purchase  ?  322 
objections  to  confiscation,  323 
the  real  difficulty  of  a  proletarian 

re'ghne  is  production,  324 


Labour,  division  of,  1 1 

superiority    of     collective     over 

individual,  132 
substitution     of     women      and 

children's,  for  that  of  men's, 

137-39 
intensity  of — "  speeding  up,"  140 
effect  upon,  of  the  development 

of  steam  navigation,  144-45 
nomadic,  147 
method  of  fixing  recompense  for, 

189 
socially  necessary,  191 
waste  of,  under  existing  system, 

214 
manual,  will  cease  to  be  despised, 
220 
Labour-cheques,  dangers  of,  200 
Labour-force,  cost  of  the  produc- 
tion of,  122 
as  a  marketable  article,  122 
the  origin  of  "  plus-value,"  122 
includes  a  moral  element,  124 
value  of,  in  exchange,  127 
Labour-time    the    corner-stone   of 
Marx'  system,  190 
method  of  estimating,  191 
Land,  ownership  of,  in  France,  69 
agricultural,  size  of  holdings  in 
the  German  empire,  257 
Landowners,  the  duties  of,  83 
Lassalle,    F. — wages  are    not   the 
full  remuneration  of  labour,  8 
"  luck "  as  a  leveller  of   social 

conditions,  29 
industrial  profit,  93 
origin  of  capital,  96  et  seq. 


Lassalle,  F. — profit  an  accidental 
economic  phenomenon,  100 
on  the  use  and  reward  of  capital, 

lOO-I 

"saving,"  a  negative  quality, 
103-4 

thrift  has  no  share  in  creation  of 
capital,  105 

productivity  of  capital  impos- 
sible in  ancient  communi- 
ties, 107 

capital,  a  novel  and  transitory 
phenomenon,  117 

basis  of  his  system,  119 

idea  of  subsidised  workmen's 
associations  not  worked  out, 

154 
Laveleye,     E.     de  —  criticism     of 
private    property    illustrated, 
68 
right  of  private   landowners  to 

indemnity,  71 
restriction  of  rights  of  succession, 

76 
Austrian  railways,  85-86 
Legislation,  factory,  136 
"Les    liens    sociaux,"    agents    of 
destiny,  94 
creators  of  capital,  94 
equivalent  to  "luck"  or  "chance," 

95 
Liberalism — conflict  with  socialism, 

^3     .     .        . 

not  capitalism,  is  the  antithesis  of 
socialism,  268 
Liberty,  industrial,  under  a  coUec- 
tivist  system,  9 
individual,  13 
of  domicile,  13 
of  choice  of  occupation,  13 
intellectual,     under     coUectivist 

regime,  166 
of  minorities,  241 
Locomotion,  increased  facilities  for, 
not  antagonistic  to  family  life, 
262 
London,  the  daily  provisioning  of, 

"  Luck  "  an  incentive  to  enterprise, 

99 
Luxury,  effect  of  the  production 

of,  215 
what  constitutes  ?  221-22 
an  incentive  to  invention,  223 


INDEX 


337 


Luxury — effect    of    conversion    of 
producers  of  luxuries  into  pro- 
ducers of  necessaries,  226 
production    of   luxuries    an    in- 
direct  provision    of    neces- 
saries, 227 
gain  from  suppression  of,  insig- 
nificant, 232 
and  the  progress  of  civilisation, 

235 
Lyons,  hospitals  of,  under  private 
administration,  304 


M 


MacCulloch,  and  the  "wage-fund," 

143 
Machinery,  and  the  displacement 
of  labour,  143-45 
evils  caused  by  introduction  of, 

143 
Machines,   a    protection   to   wage 

earners  at  times  of  crisis,  147 
Mahommedanism,  ignored  by  Marx 
as  a  factor  in  human  develop- 
ment, 249 
Malon,     quotes     Stuart     Mill     in 
support  of  collectivism,  168 
translator  of  the  Quintessence  of 

Socialism  into  French,  245 
"What  is  the  law  of  degenera- 
tion    and     renaissance     of 
socialism  ?  "  276 
Malthus,    new   phenomena    since 
publication  of  his  book,  80 
socialists    are    usually  disciples 

of,  95,  note 
the  "law"  of,  not  an  "economi- 
cal" law,  123 
error  arising  from  rash  general- 
isation, 263 
Manifesto,  the  Communist,  and  the 
condition  of  the  modern  work- 
man, 265 
Market,  effect    of  fluctuations  of 
the,  95 
cosmopolitan,  96 
universal  and  "capital,"  116 
Marx,  Karl,  3 
capital  not  created  by  saving,  8 
"  values-in-use  "  and  "values-in- 
exchange,"  14 


Marx,  Karl — origin  of  commercial 
capital,  22  et  seq. 

"protection"  as  a  source  of 
private  wealth,  23 

"  luck  "  as  a  distributor  of  wealth, 
29 

sporting  estates  in  Scotland,  87 

origin  of  capital,  93 

capital  only  entitled  to  main- 
tenance and  replacement, 
109 

profit  or  "  plus-value,"  1 16 

circulation  of  commodities  the 
starting-point  of  capital,  116 

"absolute"  and  "relative  plus- 
value,"  116 

definition  of  commerce,  118 

basis  of  his  system,  119 

thesis  that  money  increases  by 
circulation  is  un proven,  120 

claim  that  the  theory  of  "plus- 
value"  is  true  for  "indus- 
trial" as  well  as  for  "com- 
mercial" capital,  120 

conception  of  a  "capitalist," 
121 

"  profit "  cannot  arise  from  the 
exchange  of  equivalents, 
121 

the  market  for  labour,  122 

division  of  capital  into  "con- 
stant" and  "variable,"  125 

the   just    claims    of    "capital," 

125 

the  "  value  -  in  -  use  "  of  labour- 
force  double  that  of  its 
"value-in-exchange,"  128 

capital  alone  profits  by  improve- 
ments in  machinery,  132 

economy  effected  by  socialised 
labour  is  appropriated  by 
capitalists,  132 

capitalistic  system  creates  unem- 
ployment, 141  et  seq. 

the  necessity  of  the  "unem- 
ployed" as  an  industrial 
reserve,  146 

pauperism  increases  pari  passu 
with  wealth,  148 

accumulation  of  wealth  the  effect 
and  the  cause  of  a  surplus  of 
labour,  149 

on  the  use  of  the  national  pro- 
duct, 188 


^38 


INDEX 


Marx,   Karl — labour,  as  the   sub- 
stance and  standard  of  value, 
the  comer-stone  of  the  Marxian 
system,  190 
formula  for  value  loses  all  mean- 
ing when  applied  to  a  multi- 
tude of  objects,  193 
restricted  definition  of  value  by, 
the     cause     of    coUectivist 
errors,  193 
altogether  ignores  difficulties  of 
determining    the    value    of 
work-time,  194 
doctrine  useless  as  a  means  of 
providing   for  the  distribu- 
tion of  wealth,  197 
makes  all  human  development 
depend    upon    "  production 
and  exchange,"  248 
and  the  Hegelian  dialectic,  249 
final  cause  of  economic  crises, 

263 
La  Mislre  de  la  Philosophies  265 
sources  of  information,  266 
adherents      of      doctrines      in 
France,       Germany,       and 
England,  280 
Master,  the,  of  former  days  is  not 
the  prototype  of  the  capitalist 
of  to-day,  131 
Mill,   J.    Stuart  —  agricultural   co- 
operative societies,  67 
restriction   of  rights  of  succes- 
sion, 76 
hypothetical  purchase  of  land  by 

the  state,  79 
the  dangers  of  state  administra- 
tion, 168 
machinery  has    not  diminished 

labour,  216 
introduction  of  machinery,  268 
Millerand,  a  socialiste  transigeant, 
272 
Socialisme  Riformiste^  275 
meeting  at  Vierzon,  278 
policy  of   a    slow  approach   to 

collectivism,  278 
Bordeaux  congress,  280 
Millionaires  in  Prussia,  320 
Money,  functions  of,  100 
a  token  of  exchange,  118 
the  point  of  departure  and  goal 

of  production,  119 
circulation  of,  an  end  in  itself,  1 19 


N 


Naples,  and  municipal  trading,  306 
National,  risks  under  a  coUectivist 
regime,  164 
provision  for,  expenditure,  198 
property  rests   upon    the    same 
principles    as    private    pro- 
perty, 212 
Nationalities,  collectivism  involves 

destruction  of,  213 
New  Zealand,  21 
Niewenhuis,  Domela,  281 
"Nord,"  department  of  the,  192 


Obligations,  contractual,  and  pre- 
natal ties,  310,  311 
Officials,  and  their  assumption  of 
functions  formerly  discharged 
by  the  privileged  classes,  313 
why  socialistic  appeals  to  highly 
salaried,    are     unsuccessful, 

317 
"  Ommiarques,"  183 
Oppenheimer,  Dr  Frank,  on  agri- 
cultural associations,  293 
Organisation,  existing  economic,  8 

of  middle  ages,  15 
Owners,  the  interest  of  private,  82 


Paris,  distribution   of  incomes  in, 
236 
the  daily  provisioning  of,  157 
Parks,  value  of  private,  88 
"  Parti  Socialiste  frangais,"  279 
*'  Parti  Ouvrier,"  280 
"  Parti  Socialiste  de  France,"  280 
Party,  Independent  Labour,   com- 
pelled   to     accept    socialistic 
principles,  283 
Patents,  socialisation  of,  128 
retard  the  introduction  of  new 
machinery,  146 
Pauperism,  conditions  of,  less  de- 
grading than  formerly,  130 
statistics  of,  quoted  in  disproof  of 

Marx'  assertions,  149-50 
in  Paris,  151-52 


INDEX 


339 


Pauperisation,  the  theory  of,  com- 
ments by  Bernstein,  270 
Plutocracy,  and  the  middle  classes, 

251 
"  Plus- value,"  absolute,  116 
relative,  116,  129 
theory  of,  true  of  "  industrial "  as 
well    as    of    "commercial" 
capital,  120 
exchange  cannot  be  the  origin 

of,  121 
derived  from  labour-force,  122 
variation  of,  due  to  two  causes, 

129 
Bernstein  on,  251 
Political  economy,  an  abstract  and 

conventional  system,  94 
Population,  cause  of  the  movement 

of,  into  towns,  240 
Potter,  Miss  Beatrice  (Mrs  Sidney 
Webb),    on    co-operation    for 
production,  291 
Prescriptive  right,  28 
"  Price,"  the  automatic  regulator  of 

production,  162-64 
Prizes    for    meritorious    collective 

work,  181,  186 
Produce,    distribution    of,    in    ex- 
change   for    labour  -  cheques, 
198 
Product,  surplus,  255 
Production,  industrial,  in   France, 
112  et  seq. 
scientific  organisation  of  national, 

160 
problem  of  adjustment  of  supply 

and  demand  unsolved,  174 
under  individual  and  under  col- 
lective effort  contrasted,  174 
modem    system    of,  necessarily 

involves  some  waste,  240 
capitalistic,  251 

characteristic  of  modern,  an  in- 
crease of  productivity,  255 
Profit,    conceptions    necessary    to 
make  the  idea  of,  intelligible,  99 
an  accidental  economic  pheno- 
menon, 100 
definition  of,  no 
per  head  of  workmen  employed, 

113-15 
or  "plus-value,"  116 
industrial,  upon  what  it  depends, 

130 


Profit,  the  only  possible  safeguard 

of  production,  180 
Progress,  is  due  to  individuals,  104, 

183 
how  could,  be  maintained,  182 
Proletariat,  definition  of,  7 
the  rural,  would  derive  no  advan- 
tage from  state  ownership  of 
the  land,  70 
the,  and  the  increase  of  produc- 
tion, 255 
the  intellectual,  313 
Property,  private,  contrary  to  jus- 
tice, 6-7 
derived  from  labour  of  others, 

distribution  of  landed,  in  France, 

20 
increase    in    value    of    landed, 

20  et  seq. 
landed  private,   and  coUectivist 

ownership,  68  et  seq. 
national,   rests   upon    the    same 
principles  as  private,  212 
Proprietors,  expropriation  of  landed, 

66 
Protection,     not     antagonistic    to 

socialism,  23 
Proudhon,  on  the  introduction  of 
machinery,  144-46 
remark  about  Louis  Blanc,  154 
on  luxury,  222 
Prussia,  distribution  of  incomes  in, 
235,  252 
proportion  of  workers  in,  in  large 
and  small  industries,  256 


R 


Radicals,  no  substantial  difference 
between  methods  proposed  by, 
by  the  Marxists,  by  "  Social- 
istes  reform  istes,"  and  by 
"Socialist  Radicals,"  325 

Renaissance,  ignored  by  Marx  as  a 
factor  in  human  development, 
249 

Rations,  coUectivist  regime  would 
be  compelled  to  adopt  a  system 
of,  201 
a  system  of,  necessary  to  main- 
tain equality,  206 


340 


INDEX 


Renard,  George — enquiry  into  the 
political  differences  of  social- 
ism, 280 
summary  of  results  of  enquiry,  287 

Rent,  in  Paris,  236 

Revolution,  the  French,  abolished 
feudal  rights,  20 

Revue    Soctaliste,    the     views     of 
Malon,  276 

Ricardo — spontaneous    and    con- 
tinuous increase  of  rent,  77-78 
error  arising  from  rashgeneralisa- 
tion  by,  263 

Richter,    Eugene — theory    of   the 
patriarchal  employer,  316 

Rochdale,  the   equitable  pioneers 
of,  294 

Rousseau,  the  Conirat  Social,  311 


Saving  by  the  upper  and  middle 

classes  in  France,  237 
Savings-banks,  French,  103 
Saxony,  incomes  in,  253 
Schaffle,  Dr  A. — only  exponent  of  a 
method  for  the  establishment 
of  socialism,  3 
lethargic  administration,  17,  note 
influence  of  "  chance "  an  argu- 
ment   in     favour     of    col- 
lectivism, 29 
can  the  incentive  of  competition 
be  adequately  replaced  ?  30 
admits  right  of  private  owners  to 

indemnity,  71-72 
Quintessence    of  Socialism    the 
only  book  which  attempts  to 
explain  the  constructive  side 
of  collectivism,  154 
description  of  the  "  New  Social- 
ism," 155 
socialism  has  no  clear  scheme 
for  the  organisation  of  com- 
peting labour,  159 
on    administration    and    book- 
keeping, 163 
objects  of  commercial  enterprise, 

163 
every  one  would  retain  right  to 
decide    upon    his    personal 
requirements  under  a    col- 
lectivist  regime,  164 


SchafHe,  Dr  A. — admits  that  collec- 
tivism would  be  a  constant 
menace  to  freedom  of  personal 
demands,  167 

if  the  wants  of  individuals  were 
to  be  limited  by  its  officials, 
collectivism  would  be  the 
enemy  of  freedom,  167 

unable  to  discover  any  substitute 
for  "  price  "  as  the  regulator 
of  production,  169 

wages  cannot  be  estimated  only 
on  the  basis  of  cost  in 
"labour-time,"  170 

repetition  of  phrases  indicating 
doubt  as  to  the  practicability 
of  collectivism,  170 

his  suggestions  violate  the  funda- 
mental principles  of  social- 
ism, 173 

condition  of  state  administration 
under  existing  system  alto- 
gether different  from  that 
under  a  coUectivist  govern- 
ment, 175 

mutual  surveillance,  176 

official  regulation  an  inadequate 
inducement  to  work,  178 

confesses  that  Marx'  theory  is 
incapable  of  supplying  a 
satisfactory  law  for  distribu- 
tion, 180-95 

equality  of  wages,  182 

collectivism  would  find  a  place 
for  inequality,  186 

the  guarantees  collectivism  would 
offer  to  thrift,  187 

collective  thrift,  188 

illustration  which  contradicts 
Marx'  theory,  192 

in  attempting  to  enlarge  Marx' 
narrow  formula,  is  unfaithful 
to  his  doctrine,  193 

recognises  the  difficulties  of 
determining  the  value  of 
work-time,  194 

destroys  the  illusion  of  those  who 
believe  that  scientific  social- 
ism offers  a  clearly  defined 
solution  of  social  questions, 

195 
asserts  that  exchange-value  must 
be  determined  not  only  by 
"  cost "  but  also    by  "  use- 
value,"  195 


INDEX 


341 


Schaffle,  Dr  A. — admits  that  Marx' 
theory  is  incapable  of  supply- 
ing a  satisfactory  law  for  dis- 
tribution, 19s 
system   for  distribution   of  pro- 
duce, 198-9 
on  the  employment  of  private 
wealth  under  a  coUectivist 
regime,  201 
anxious  to  accentuate  difference 
between    communism    and 
collectivism,  202 
thrift  under  a  coUectivist  regime, 

202 
the  "aged"  and  "inheritance" 
under  a  coUectivist  regime, 
203 
doubtful  as  to  the  form  of  recom- 
pense for  professional  ser- 
vices, 204 
collectivism  does  not  require  a 
periodic  division  of  property, 
206 
maintenance  of  freedom  of  choice 

of  domicile,  207 
shows    no    appreciation  of   the 
importance   of   the    foreign 
relations       of      coUectivist 
states,  211 
costly  advertisements,  216 
Schramm,  explanation  of  probable 
meaning   of  Marx'   theory  of 
"value,"  196 
Schulze  de  Delitzsch,  93,  106 

definition  of  capital,  96 
Senior,  on  the  manufacturer's  profit, 

131 
Shareholders,  idle,  254 
Shares,  in  joint  stock  companies, 

254 
Sheffield,  and  municipal  trading, 

306 
Sigg,  Jean,  281 

Sismondi,  the    originator    of   the 
Marxian  theory  of   the   con- 
centration of  wealth,  etc.,  251 
Slavery,  and  the  division  of  labour, 

106-7 
Social  labour-time,  169 
the  idea  of,  the  basis  of  social- 
ism, 190 
recompense  for,  now  determined 
by  law   of  supply  and  de- 
mand, 190 


Social  conditions  external  to  indi- 
vidual, 29 
payment  for  personal   services, 

development    of    inequality    in 

conditions,  202 
inequality,  fundamental  causes  of, 

206 
the,  account  and  its  rectification, 

3" 
the  effect  of,  environment,  311 
"  Socialism,  New,"  3 
definition,  3,  4 
spread  of  infection,  5 
industrial  improvements,  128 
the  "New,"  explained,  155 
scientific,  a  mockery,  196 
evolution  of,  since  1895,  245 
Marxian,  a  medley  of  obscure 

ideas,  246 
is    the  antithesis  of  liberalism, 

not  of  capitalism,  268 
municipal,  and  Bernstein,  269 
meaning  of  scientific,  270 
theoretical,  tending  to  disappear, 

276 
the    vague    aspirations    of,    are 

dangerously  attractive,  276 
of  the  salon,  283 
election,  church,  or  "  good,"  284 
the  five  points  of  the  new  system 

of,    adopted    in     England, 

Belgium,        France,       and 

Germany,  289 
municipal,  303  et  seq. 
identity  of   the    programme    of 

"Socialisme  reformiste"  with 

that  of  the  orthodox  Marxists, 

the    opportunists,    and    the 

radicals,  318-19 
and  the  cost  of  the  army,  319 
"  Socialisme  critique,"  288 
"  Socialisme  reformiste,"  288 
"  Socialisme  reformiste  "    and   the 
municipalisation  of  industries, 

,301 
Socialists,  recognise  difficulties  of 
national  production,  169 
divergencies  of  opinion  amongst, 
(see  Enquiry  by  G.  Renard), 
280  et  seq. 
"  Socialistes  refomiistes  "  rely  upon 
co-operation  as  a  propaganda 
for  collectivism,  294 


INDEX 


Socialisation,  would  the,  of  means 
of  production  be  well  received 
by    the    superior    classes    of 
the  proletariat?  315 
Socialistic    aspirations  remain  un- 
altered, although  new  forms  of 
socialism  have  arisen,  278 
Society,    elastic    organisation    of, 
facilitates  the  development  of 
inventions,  183 
primitive,  disinclined  to  abandon 
traditional  customs,  239 
"  Solidarism,"  description  of,  309 
programme  of,  312 
leads  necessarily  to  collectivism, 

312 
a  fantastic  doctrine,  312 
Sorel  —  "Socialistic     Ideas     and 
Economic   Facts   in  the    19th 
Century,"  276 
Spencer,  Herbert,  157 
State,  assumption  of  landed  pro- 
perty by,  66 
defence  of,  administration,  175 
the,  and  its  difficulty  in  supplying 
an  army  or  even  a  brigade 
when  mobilised,  186 
the,  and  waste  in  distribution, 

186 
objections  to  state  administration, 
302 
Statistics,  use  of,  161 
Strikes,  colliery,   in    the    "Nord" 
department,  114 
colliery,  at  Anglers,  115 
number    of,    no    indication    of 

extreme  distress,  136 
general  effect  of,  136 
Strum,  theory  of  the  patriarchal 

employer,  316 
Suffrage,     attitude     of    socialists 
towards  universal,  13 


Tammany,  and  municipal  trading, 

306 
Taxation,  for  the  common  benefit, 
188 
of  luxury  a  proscriptive  of  art, 

223 
the     "  Socialistes     r^formistes " 
and,  309 


Taxation,  progressive,  319 

progressive,  on  income  derived 
from  public  funds,  322 
Tellow  agricultural  co-operation,  67 
Thrift,  imparts  a  new  direction  to 
industry,  105 
would  be  replaced  by  "  hoarding  " 
under  a  socialistic  r^//«^,  108 
incentives  to,  186 
national,  187 

annual  amount  of,  in  France,  187 
due  to  the  minority  of  the  citizens 

of  a  country,  188 
under  a  collectivist  regime,  202 
Thunen,   von  —  co-operative  land 

association,  67 
Ties,  men  bound  by  pre-natal,  310 
Times,  the,  and  municipal  social- 
ism, 303-5 
Trade,  the  uses  of  cosmopolitan,  210 
Trades-unionism,  genesis  of,  135 
Trades  -  unions,    meaning    of,    to 

socialists,  308 
Traders,  superfluous,  217 
Typewriters,  use  of,  by  municipali- 
ties, 306 


U 


Unemployed,     the,     created     by 
capitalistic  system,  141  et  seq. 
the,  form  the  necessary  reserve 
of  the  industrial  army,  146 
Unemployment,    small    industries 
and  home  work   suffer  most 
from,  146 
a  victorious  proletariat  alone  able 
to  deal  with,  321 
"  Unearned  increment,"  TJ,  97 
United  States,  21 
Usury  and  labour-cheques,  204 
Utopia,  a  bourgeois  conception  of, 
265 
Millerand's  opinion  of,  275 


Vaillant,  280 

Values,    "  in    use " 
change,"  14 
"  in  exchange,"  94 
of  "utility,"  95 


and 


INDEX 


343 


Values,    of    "utility"     and    "ex- 
change," 119 
of  "utility,"  as  an  element    in 

fixing  wages,  171-72 
socialistic  theory  of,  178,  i8o 
the  substance  of,  of  products  lies 
in  the  labour  socially  neces- 
sary for  their  production,  191 
common  standard  of,  191 
if  regard  is  paid  to  "  utility,"  in 
estimating     the     value     of 
labour,   workmen    must    be 
classified,  194 
Vandervelde,  description  of  Belgian 
co-operative  societies,  299-300 
Vegetarians,  lean   towards  social- 
ism, 167 
Vierzon,  meeting  at,  278 
Vorwaris,  criticism  on  the  Quint- 
essence of  Socialism,  196 
Bernstein,  editor  of,  246 


W 

Wage  earners,  under  a  coUectivist 
regime,  12-13 
improvement  in  condition  of,  and 
Marx'  theory,  123 
Wage-fund,  repetition  of  fallacy  of 

the,  by  Marx,  142-43 
Wages,  increase  of,  in  France,  142 
variation  of,  173 
necessary  inequality  of,  182 
method  of  determining,  189 


Wages,  equality   of,   if  work-time 
taken  as  the  measure  of  value, 
194 
iron  law  of,  comments  by  Bern- 
stein, 269 
Wealth,  agricultural,  derived  from 
confiscation,  19 
private,  created  by  causes  inde- 
pendent of  owner,  26 
use  for  private,  under  a  coUec- 
tivist regime,  20 1 
Webb,  Sidney,  281 
tendency  of  associations  of  pro- 
ducers is  towards  oligarchy, 
293 
Wilson,    on    the    manufacturer's 

profit,  131 
Work-day,  reduction  in  length  of, 
130 
length    of,    and    the    "corvde," 

Workmen,  separation  of,  from  their 
tools,  14 
Parisian,     demand    a    tax    on 

machines,  183 
the  hopelessness  of  their  posi- 
tion an  axiom  of  "  scientific 
socialism,"  266 
Workshop,     the     proletariat     the 

master  in  the,  321 
Work-time,  socially  organised  can 
never  be  a  satisfactory  basis 
for    a     law     of     distribution, 

193 
as  a  measure  of  value,  194 


PBINT8D    BY 

OLIVUa  AND  BOYI> 

ablNBL'ltOH 


DATE  DUE 

GAYLORD 

PRINTED  IN  U.S.A. 

■  SOV'^^fV  °EG'P'J«'.  1  'Pa«Pv  c*'- 


mil  II I 

A     001  076  560     o 


